Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

ASHRIDGE (BONAR LAW MEMORIAL) TRUST BILL

Read the Third time, and passed.

Oral Answers to Questions — EDUCATION AND SCIENCE

Private Schools (Regulations)

Mr. Michael McNair-Wilson: asked the Secretary of State for Education and Science if he will list the regulations governing the opening of a school by a private individual.

The Secretary of State for Education and Science (Sir Keith Joseph): Under part III of the Education Act 1944, all independent schools have to be registered initially on a provisional basis. This is precluded only if the proprietor or premises have previously been disqualified under the Act. In applying for registration, proprietors have to conform to the requirements of the Education (Particulars of Independent Schools) Regulations 1982.

Mr. McNair-Wilson: I am grateful to my right hon. Friend for that answer. Does he agree that there are wide disparities between the qualifications of staff and the facilities available at private schools, although they are not always recognised by parents? Is there not a strong case for the reintroduction of the efficiency classification scheme that existed until April 1978?

Sir Keith Joseph: I agree with the first part of my hon. Friend's question. I am not prepared to extend public sector manpower to carry out a service that some of the independent schools are conducting by their own accreditation scheme.

Mr. Neale: Will my right hon. Friend consider revoking the circular issued in 1978 by the right hon. Member for Crosby (Mrs. Williams) and permitting educational nursery schools to register as efficient, thereby removing them from the effects of the Nurseries and Child-Minders Regulation Act 1948?

Sir Keith Joseph: That is a slightly different question, I shall study the issue and write to my hon. Friend.

Primary School Closures

Mr. Knox: asked the Secretary of State for Education and Science what proportion of proposed primary school closures submitted by local authorities he has approved since May 1979.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): Published proposals for the closure of 538 primary schools were decided between 1 May 1979 and 28 February 1983. Local education authorities determined 89 of these as they attracted no statutory objections. My right hon. Friend and his predecessor approved 426 and rejected 23 of the remainder.

Mr. Knox: When reaching decisions about school closures, what weight does my hon. Friend place on financial considerations? Does he agree that it is difficult to get accurate financial information about savings on prospective school closures? Are there not special difficulties relating to the closure of rural schools and claimed savings in school transport, bearing in mind that the cost of school transport continues to rise?

Dr. Boyson: Before decisions are made under section 12 my right hon. Friend considers proposals for school closures from local education authorities. The considerations are primarily the education of the children involved, the fact that small schools may not have the variety of teachers required, how far the children have to travel to school, whether journeys take more than 35 minutes, and finance. The more that is spent on one aspect of education, the less that can be spent on another. However, rural schools are examined carefully, because of their effect on rural communities.

Mr. Beith: In considering school closures, will the Secretary of State have regard, as he did in a recent case in my constituency, to the important contribution of Church schools to our education system? Will he note the threat by the Liverpool Labour party to abolish Catholic schools and the reaction of the Catholic authorities? Will he resist any doctrinaire attempt to drive out of the system the contribution made by Church schools?

Dr. Boyson: The Government and, I am sure, many Opposition Members, are committed to the retention of denominational schools where parents desire them. I have read a report of what the hon. Gentleman referred to, and I know that that subject concerns many hon. Members. Children ought to be brought up in the faith of their parents if their parents wish them to attend denominational schools.

Mr. Kenneth Carlisle: Does my hon. Friend agree that some of the schools threatened with closure receive tremendous parental support? What weight will he give to that parental support in reaching his decision?

Dr. Boyson: The objections of parents and people in the area to any proposed school closure are considered carefully. If statutory objections are made by parents or others, they go to my right hon. Friend the Secretary of State. We always pay close attention to verbal and written objections from parents and consider their desire for a school to continue.

Mr. Kinnock: Is the Under-Secretary of State aware that hon. Members have just heard an unusually cheapjack


jibe from the hon. Member for Berwick-upon-Tweed (Mr. Beith), which would seem to have much more to do with Darlington than with Liverpool or any other part of the country? I am sure that the Under-Secretary knows that the Labour group in Liverpool has published a comprehensive statement declaring its support for the continuation of denominational education and the proper exercise of parental choice in that city.

Dr. Boyson: It is difficult to know what the question was. The hon. Member for Bedwellty (Mr. Kinnock) said that he was sure that I knew about the statement, but I have not seen it. However, I must look at it and reply to it. In fairness, I have quoted in the House statements of certain Labour Members who are certainly against denominational schools. This is not the first time that the issue has come to the notice of the House.

University College, Buckingham

Mr. Whitehead: asked the Secretary of State for Education and Science what consultations he had before chartered status was given to the University College of Buckingham.

Sir Keith Joseph: In advising the Privy Council I had before me written memoranda from the Association of University Teachers, the Central Council for Non-Teaching Staffs in Universities, the Council for National Academic Awards and the Committee of Vice Chancellors and Principals.

Mr. Whitehead: Is it not a fact that that proposterous institution is now a university only because it is so styled in the charter that has been awarded to it by the Secretary of State? Will he confirm that the CNAA declined to validate the honours degree at Buckingham nine years ago and that the Committee of Vice Chancellors and Principals would have recommended—had the right hon. Gentleman chosen to consult it—that there should be an independent academic assessment? Does the right hon. Gentleman accept that many of us see this issue as a shabby political pay-off of the worst possible kind, and an insult to reputable academic institutions in this country?

Sir Keith Joseph: The college became a university by the same process as other modern colleges have become universities over the years. It is true that nine years ago the CNAA refused to validate a particular course, but the professional bodies served by the students gave professional qualifications to graduates of Buckingham college. This institution shows what can be done outside the state sector. It is an admirable example of combining relatively short degree courses with high standards and research. There is much for the public sector to learn from that university.

Mr. Brinton: Does my right hon. Friend agree that the University College of Buckingham is an excellent institution of higher education and that this country needs more—not fewer—such establishments?

Sir Keith Joseph: I agree with my hon. Friend. The fact that the university started from a relatively small base makes it the same as other places that are now accepted as perfectly normal universities.

Mr. Christopher Price: Just to prove that it is not a shabby political pay-off, will the Secretary of State consider granting a charter to Goldsmiths' college in the

borough of Lewisham, which is to lose its London university status, or would the Left-wing leanings of Mr. Richard Hoggart, its principal, act in some way against that, just as they did when he was on the Arts Council?

Sir Keith Joseph: The hon. Gentleman is free with his allegations in the House. I would hope to bring the same standards to bear on any proposal for university status that came before me.

Truancy

Mr. Heddle: asked the Secretary of State for Education and Science if his Department issues guidance to local education authorities on truancy.

Dr. Boyson: The main responsibility for school attendance rests with local education authorities. However, I share my hon. Friend's concern about the problems of truancy. We have recently sought information about truancy from a selection of authorities.

Mr. Heddle: As 12,000 school children between the ages of 11 and 15 were convicted of criminal offences in the west midlands alone last year, and as 15 out of every 100 secondary school children are known to have a history of hard core truancy, does my hon. Friend accept that there is a direct link between hard core truancy and teenage crime? If so, what steps does he propose to take to make parents more responsible, teachers more accountable and the courts more effective?

Dr. Boyson: That is a wide question. I read the article that my hon. Friend recently wrote on this issue. From the research that I have seen, which is available to other hon. Members, it would seem that there is undoubtedly a connection between hard core truancy—I believe that was my hon. Friend's phrase—and criminal activity. We are having informal discussions with local authority bodies because we are concerned about the figures. Indeed, a recent survey in inner London showed that about 10 per cent. of pupils aged 11 were absent from school and that about 25 per cent. were absent by the age of 15. That is very serious.

Mr. Greenway: Does my hon. Friend agree that pupils play truant from school when the school courses are not up to the proper standard? What is my hon. Friend's view of the practice of the French Socialist Government of withholding family benefit from the parents of children who persistently play truant?

Dr. Boyson: It is no doubt true that if pupils do not consider that their school courses bear any direct relationship to the life that they will lead outside school they are more likely to play truant. The idea of the new technical and vocational education initiative is to make school more relevant to all our pupils. I believe that my hon. Friend has recently been to France, and I look forward to the Department of Education and Science and the Department of Health and Social Security having consultations with him.

Mr. Marks: Will the Minister agree not to take the line that has been suggested? I know that the Government like to punish the worst off families, but that would hit them very hard. Will the hon. Gentleman take into consideration not only hard core truancy but the fact that much juvenile delinquency occurs when children occasionally play truant, perhaps because they do not like a teacher or


because there are troubles at home? Does he agree that checking up in the schools can act as a form of protection against that?

Dr. Boyson: The hon. Gentleman has considerable experience of schools. I agree that the education and welfare officer—who was once called the school attendance officer and who at least knew what he was doing—has an essential part to play in getting children to school. The hon. Gentleman implied that the Government might take it out on hard-luck families, but that is not true. We are concerned that all children should have a genuine feeling for life and a good education. That is why we want them all to be in school.

Full-time Education (16-plus)

Mr. James Lamond: asked the Secretary of State for Education and Science if he will arrange for an allowance to be paid to those young people who remain in full-time education after 16 years of age.

The Under-Secretary of State for Education and Science (Mr. William Shelton): I have nothing to add to the reply my right hon. Friend the Prime Minister gave to a questiion by the hon. Member for Stockport, North (Mr. Bennett) on 22 February 1983.

Mr. Lamond: Is the Minister aware of the concern being expressed by local education committees in towns such as Oldham that the economic pressure on 17 and 18-year-olds will be intensified by the introduction of the youth training scheme? It will cost parents, who may be unemployed, £25 per week to keep a child at school.

Mr. Shelton: Perhaps I can reassure the hon. Gentleman by saying that the staying-on rate in full-time education for those over 16 years is higher than it has been since the raising of the school leaving age. It is extraordinary that it should be the Labour party's official policy to pay perhaps £500 million in dead weight to youngsters who are already staying on.

Mr. Arthur Lewis: Is the Minister aware that the democratically elected London borough of Newham has decided to pay the £25 per week to students who stay on at school? May I take it that the hon. Gentleman, or his Department, will ensure that at least part, if not all, of that will be paid for out of the Exchequer's funds, because it will keep those young people off the streets and save a great amount of the money spent to make good the effects of vandalism and so on? Is it not worth giving a little towards that, thus probably saving on the large amounts given to the police to deal with crime and vandalism?

Mr. Shelton: I remind the hon. Gentleman that local education authorities can already give education allowances or discretionary grants. More than £20 million was given in that way last year. I have seen the press notice in the local press. We have no details yet, but I saw in the press notice that £500,000 is being reserved for that purpose. No doubt the ratepayers will realise that the money is being paid to youngsters, most of whom would stay on anyway.

Mrs. Renée Short: asked the Secretary of State for Education and Science if he will take steps to encourage more 16-year-olds to stay in full-time education.

Mr. William Shelton: My right hon. Friend is already doing so by providing in our expenditure plans for

additional expenditure by LEAs on 16 to 19 education, encouraging the introduction of a new pre-vocational qualification at 17-plus, and in other ways.

Mrs. Short: Is the Minister aware that when I put the point to the Secretary of State yesterday he did not want to believe me when I quoted to him the figures given to me in a written answer by his hon. Friend the Under-Secretary of State on 9 March? Is he aware that the figures show that in the United Kingdom only 2·4 per cent. of the population are attending post-compulsory education compared with very much higher percentages in Japan, West Germany, France, Italy and even in Ireland? If one considers universities—

Mr. Speaker: Order. The hon. Member for Wolverhampton, North-East (Mrs. Short) must ask a question, because other questions on the Order Paper must be reached.

Mrs. Short: I am asking a question, Mr. Speaker. Is the Minister aware of all the facts that his Department has given to me? What is the Minister doing—I can see that the Secretary of State is prompting him—and what: is the Department doing—all four Ministers are present on the Front Bench—to ensure that we do not waste the skill and talents of so many young people today?

Mr. Shelton: If the hon. Lady reads the footnotes, she will stop misinterpreting the figures. My right hon. Friend the Secretary of State will write to her. I repeat that more youngsters are staying on in full-time education post-16 than under any previous Government since the raising of the school leaving age.

Mr. R. C. Mitchell: Despite what the Minister has just said, is he aware that some 16-year-olds who should stay on at school to take A-levels are reluctant to do so because they do not wish to be a financial burden on their parents? Will he ask Her Majesty's inspectors, after consultation with the principals of colleges and schools, to investigate this problem?

Mr. Shelton: I accept that there is a problem, but it is somewhat alleviated by the raising of child benefit allowance, which goes to parents of youngsters in full-time education, and also by the discretion of local authorities to pay awards and allowances to those in financial hardship.

Ethnic Minorities

Mr. Proctor: asked the Secretary of State for Education and Science what recent representations he has received concerning special assistance from his Department for the ethnic minorities; and if he will make a statement.

Dr. Boyson: My right hon. Friend often receives representations about the particular educational needs of ethnic minority children. Our policy is that all children, whatever their background, should have an education which enables them to fulfil their potential and to play their part in British society.

Mr. Proctor: For how long will this special assistance to the ethnic minorities continue? Will my hon. Friend give an assurance that there will be no diminution in educational standards as a result of resources going into those areas?

Dr. Boyson: If children come from non-English-speaking backgrounds, additional resources are required to teach them English, not only for their sake, but for the sake of other children in their classes. If that need is there, help will be given.

Mr. Jim Marshall: Will the Under-Secretary of State, who is keen to protect and maintain denominational schools, ensure that Sikhs, Hindus and Moslems are able to participate in their own religions in the state schools?

Dr. Boyson: As a former headmaster of schools with mixed intakes where there were separate assemblies, I can tell the hon. Gentleman that there is nothing to stop local education authorities and schools arranging for separate assemblies inside their schools where there are specific groups or numbers of any of those particular religions.

Mr. Alton: How many local authorities have specialised language centres for helping children from ethnic minorities? What resources are currently being made available to them?

Dr. Boyson: Local authorities differ in the way in which they deal with this matter. Some send the teachers to the schools; others take the children out to special centres. I cannot give the figures. If the hon. Gentleman writes to me, I will give him all the specific information that I have.

Mr. Nicholas Winterton: I fully endorse the comprehensive responses made by my hon. Friend to the questions put to him so far. However, does he agree that ethnic minorities in this country have a responsibility to their own children? Does he further agree that it would be helpful if the mothers and fathers of those children who have recently come to this country did their best to help their children by speaking English in their homes, as there would then not be so many problems in the schools? What consideration is my hon. Friend giving to this aspect? Does he agree that, by providing too much money for ethnic minorities, many of our own people may suffer as a result?

Dr. Boyson: It is normal for immigrant parents who speak English to speak English in their homes. The problem arises when the parents do not speak English. Some authorities have started evening classes which parents can attend. It is an excellent move for authorities to arrange for evening classes in the English language so that mothers, particularly, can also become part of our society.

Mr. Kinnock: As a Minister, and as the hon. Member for Brent, North, will the hon. Gentleman confirm that he is committed not only to assisting education for ethnic minorities but to developing multi-cultural education to the advantage of all children, and that it is to the advantage of all children to spend properly on education for ethnic minorities? In keeping with that, does he recall the recommendations of both the Rampton committee and, indeed, the Scarman report about the importance of in-service training for teachers and the needs of children from the ethnic communities? If so, why was there no commitment in yesterday's White Paper to the improvement of such in-service training?

Dr. Boyson: The hon. Member for Bedwellty (Mr. Kinnock) may remember that when we were considering the future of colleges of education, and the rest, special

access places were kept open specifically for the training of those teachers. North London polytechnic is a specific example. There is concern about this matter. The important factor that we must remember on both sides of the House is that these children, from wherever they come, should be trained and taught to fit into our society. That is as vital for the host community as it is for the immigrant community. Anything that we do must be in keeping with that overall intention.

Newham

Mr. Spearing: asked the Secretary of State for Education and Science when he expects to make his intended second visit to the London borough of Newham.

Sir Keith Joseph: I hope to visit Newham again later this year.

Mr. Spearing: When he does, will the Secretary of State ensure that sufficient notice is given so that a proper programme can be arranged? Does he agree that the pupils of Newham deserve the facilities and resources provided by the London borough of Newham? Will he assure the House that the above average expenditure thereby incurred will not debar that authority from receiving specific grants which are now available from his Department?

Sir Keith Joseph: I make many visits to education authorities and I accept the programme that is discussed between the host authority and my representatives. I shall do the same when visiting Newham later this year. As for specific grants, each application will be considered on its merits.

Student Grants

Mr. Freud: asked the Secretary of State for Education and Science under what circumstances local education authorities are empowered to claim back student grants.

The Under-Secretary of State for Education and Science (Mr. William Waldegrave): Under the Education (Mandatory Awards) Regulations, LEAs are empowered to claim back from students any amount they have been paid which exceeds, for whatever reasons, the grant payable in respect of that year.

Mr. Freud: Will the Minister confirm that there is neither Government pressure on nor legal necessity for a local education authority to sue the estate of a deceased student for the return of an education grant? Will he also tell the House and the Cambridge education authority whether it is statutory or mandatory for the grant to the sister of a deceased student to be cut in the middle of an academic year by virtue of the death of her brother?

Mr. Waldegrave: I shall take the latter point first. I believe that the hon. Gentleman knows that a local authority has the right to alter a child's grant if no grant is being paid to another child. All these matters are within the discretion of the local authority. Local authorities have different views about these matters.

Mr. Carter-Jones: When a discretionary grant has been paid by a local authority to keep a youngster from being unemployed, do the Minister and his Department consider that the authority should approach the Department of Employment to recover that money?

Mr. Waldegrave: I am not clear to what the hon. Gentleman is referring. The hon. Member for Isle of Ely (Mr. Freud) was talking about a mandatory award. It is wholly within the discretion of the local authority to give or withdraw discretionary awards.

Village Primary Schools

Mr. Hicks: asked the Secretary of State for Education and Science, in the past two years, how many applications he has received from local education authorities to close village primary schools with school rolls of 35 pupils or fewer; and in how many cases he has refused to give his consent.

Dr. Boyson: In the two years ending 31 December 1982, 163 proposals to close village primary schools were approved by my right hon. Friend and his predecessor or determined by the local education authorities concerned; 120 of these schools had 35 or fewer pupils. Over the same period proposals for 10 schools were rejected; five of these had fewer than 35 pupils.

Mr. Hicks: I am grateful to my hon. Friend for that information. Does he agree that the standard of educational provision in these schools is by far the most important criterion, followed by the impact that any such closure would have on the local community? Are not those two aspects far more important than dubious economic criteria?

Dr. Boyson: I agree entirely with my hon. Friend that the children's education and the continuation of village life are important. One must accept also that there has been a tremendous drop in the birth rate. There are about 1 million fewer children in schools now than there were four years ago. If one continues to spend large sums of money on schools whose pupils are almost disappearing, one must spend less elsewhere.

Mr. Beith: When the Minister considers again Beadnell school, which is one of those with fewer than 35 pupils, where he refused permission to close, will he take into account not just the good reasons that led him to refuse permission when the application reached him last year, but the undesirability of local authorities resubmitting, at great detriment to the school, closure proposals when there has been no change?

Dr. Boyson: I entirely accept the point made by the hon. Gentleman. Schools like stability, and if schools have threats of closure hanging over them continually parents cease to send their children to that school. The law allows the local education authority to return to us, but we should expect a local education authority to come back a second time within a short period only if it could place new facts before us.

Mr. Crouch: Can my hon. Friend assure me that neither the figure in the question nor the figures that he mentioned in his first answer will become the rule and that smaller schools will be closed automatically? Will he also bear in mind that village schools, sometimes smaller than those mentioned, can still provide good education, a basis for learning responsibility and good discipline?

Dr. Boyson: I assure my hon. Friend that my right hon. Friend will bear all those points in mind. The Government have sometimes preserved schools with 12 or fewer pupils because of the case that is put up and the education that

is being given. We have more schools now with fewer than 25 children than we had last year. The birth rate is dropping faster than closures of small rural schools.

Mr. Skinner: If the British economy can prop up television stations with fewer than 35 viewers, why cannot the Minister allow schools to operate with fewer than 35 pupils? They are more important than the breakfast television operation run by his hon. Friend the Member for Thanet, East (Mr. Aitken).

Several Hon. Members: Answer.

Dr. Boyson: I shall answer. A significant question such as that must be answered. I believe, though, that there is a slight difference. In the schools, pupils are in one place, but, as far as I know, the 35 viewers to whom he refers are not sitting in one room.

School Closures

Mr. Andrew F. Bennett: asked the Secretary of State for Education and Science what is the latest figure for the number of schools that have closed between May 1979 and the present, or for whose closure he has given his approval.

Dr. Boyson: Between 1 May 1979 and 28 February 1983 approval was given for the closure of 426 primary and 162 secondary schools. In addition, local authorities have determined proposals for 89 primary and 15 secondary schools in accordance with section 12(7) of the Education Act 1980.

Mr. Bennett: Is there not a danger that, just as most local authorities complete the closure of substantial numbers of schools, there will be a demand to open new ones? The Minister should look at the increasing number of people within the 18 to 21 age group. It does not take much imagination to appreciate that there is likely to be an increasing number of children in primary schools within the next 10 years, and in secondary schools within the next 15 years?

Dr. Boyson: The birth rate picked up in 1980, but it began to fall again last year. There are no signs at present that it is increasing. It needs more than imagination to increase the birth rate.

Mr. Lyell: Does my hon. Friend agree that it is important to face the problems of school closures, bearing in mind the rapidly falling number of pupils in schools? Does he agree that it is much better to grasp the nettle now and put pupils into the right number of schools of the right size, rather than to let them rattle about in understaffed schools with artificial pupil-teacher ratios?

Dr. Boyson: I agree with my hon. and learned Friend. I do not like children rattling around in half-empty schools. I believe that that does happen in many cases with the falling birth rate. There are schools that are only one third or half full. Teachers are withdrawn from them and they do not have full curricula. If they are not in isolated rural areas, consideration should be given to amalgamations or closures of such schools.

17-plus Examination

Mr. Watson: asked the Secretary of State for Education and Science what is the current position over the proposed new examination for pupils at 17-plus; and if he will make a statement.

Mr. William Shelton: My right hon. Friend hopes to make an announcement before Easter.

Mr. Watson: Does my hon. Friend feel that a separate examination board will be necessary for the 17-plus, or does he believe that the existing City and Guilds of London Institute can do the job perfectly well?

Mr. Shelton: I must ask my hon. Friend to wait a little for the full details, but I can tell him that a joint board will be validating the examination.

Mr. Kinnock: If the Secretary of State is in favour of a 17-plus examination to meet modern needs and to have a wide coverage, will the Minister urge his right hon. Friend to introduce a £25 grant for all youngsters staying on in education after the age of 16 so that they will' not be afflicted by the great payment differential between those who undertake the youth training scheme and those who continue in full-time education without that financial inducement and advantage and with great difficulties for their families?

Mr. Shelton: I do not believe that the hon. Gentleman was paying attention when I answered question No. 5.

University Places

Mr. Cryer: asked the Secretary of State for Education and Science if he will make a statement on the reduction in university places between 1980–81 and 1982–83.

Mr. Waldegrave: Home student entry to full-time undergraduate courses in universities fell by about 4,500 between 1980 and 1982. The entry to such courses in other institutions rose by over 18,000.

Mr. Cryer: Is it not disgraceful that people, the nation's most precious asset, are being denied the opportunity to develop talent and ability by the Government's policies, particularly as we have a Government who are supposed to enshrine freedom of choice? Is it not true that the freedom of choice that the Government support is the freedom of individuals to spend money while at the same time the public sector, which is the best way to give people educational opportunity, is being eroded by the Government?

Mr. Waldegrave: The hon. Gentleman is a little confused. What is normally called the public sector has increased by 18,000 places. Concern over what the hon. Gentleman mentioned in the first part of his question has meant that the Government have maintained the highest participation rate for the biggest age group in full-time higher education courses.

Mr. Forman: With regard to the reduction in engineering departments, can my hon. Friend and his Department do anything further to see that good engineering departments in various universities in the United Kingdom are maintained and encouraged, because we need the people who go to those departments?

Mr. Waldegrave: The output of trained engineers into the economy is steadily increasing and will continue steadily to increase. We very much hope that industry will give those people the employment that they need.

Mr. Christopher Price: What is the justification for the Government and the UGC to penalise financially an

autonomous university that feels it can admit more students, and thereby work more efficiently, and those students are fully qualified for that course? Why penalise an institution for its action in trying to be more efficient in carrying out its task?

Mr. Waldegrave: I am surprised that the hon. Gentleman wishes to attack the UGC for trying to make a strategic plan. The UGC is trying to maintain that plan. I emphasise that in no case have the token penalties been greater than the additional income brought to the university by the extra students.

Mr. Waller: Will my hon. Friend confirm that as a result of the change in the balance of university courses we now have greater strength in technological subjects, which is particularly important to this country's industrial and economic future?

Mr. Waldegrave: That is certainly the intention behind the changes that the UGC has been making.

Mr. Whitehead: As a direct result of the Government's policy in the last academic year there was a 3 per cent. fall in the number of students admitted when the number of applications rose by a similar amount. How long will the Minister be able to boast about the age participation rate for universities?

Mr. Waldegrave: The hon. Gentleman, with a characteristic one-sided view, is looking only at universities. Overall, the age participation rate has been maintained and improved.

University Grant Loan Scheme

Mr. Aitken: asked the Secretary of State for Education and Science when he expects to introduce proposals for a university grant loan scheme; and if he will make a statement.

Sir Keith Joseph: I am still considering the subject and no decisions have yet been taken.

Mr. Aitken: Is my right hon. Friend aware that ever since the late Mr. Anthony Crosland first floated the idea of a loan settlement in student grants there has been widespread support for at least an experimental scheme along those lines? Will my right hon. Friend consider following the example set by many other European countries and countries such as north America and introduce a mixture of loans and grants in an experimental scheme as soon as possible?

Sir Keith Joseph: There are strong views about both sides of the case. The Government are considering all the factors. No decision has yet been made.

Mr. Whitehead: We understand that the Secretary of State's hon. Friend is seeking large loans for his station, which, in order to survive, has turned itself into a soap opera in which people devour each other for breakfast. Does the right hon. Gentleman agree that this is an extremely serious matter and that if he were to introduce proposals for student loans he would face the same sort of student opposition as was faced by the present Government in Germany, where there have been the largest student demonstrations of all time against the proposal to introduce student loans?

Sir Keith Joseph: The fact is that there are supporters and opponents of the idea in all the political parties. I note that the German Government were re-elected by a handsome margin.

School Appeals Procedure

Mr. Greenway: asked the Secretary of State for Education and Science whether he proposes to introduce any changes in the school appeals procedure under the Education Act 1980 in the light of its first year of operation; and if he will make a statement.

Dr. Boyson: As my right hon. Friend said in reply to my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller) on 16 March, he considers that the school appeal procedure of the Act has, on the whole, worked reasonably well and to the benefit of parents. He has at present no plans for the Act's amendment.

Mr. Greenway: Will the appeal procedure cope with the huge demand for places at the new Church of England high school, the Twyford Church of England school in Ealing, which has become so much more popular than it was before it became a Church school? Is my hon. Friend aware of the huge pressure against the establishment of that Church school by the whole Labour party, led by the hon. Member for Bedwellty (Mr. Kinnock)?

Dr. Boyson: By chance, I have the figures for the applications to that school. It is amazing to note that when it was a maintained non-denominational school there were applications for only one in four places, but when, from last year, it became a Church of England school, there was a great increase in applications. This year there are more than one and a half applications for every place in that school.

Mr. Kinnock: Has the fact that Ealing borough has proposed the closure of two neighbouring comprehensive schools anything to do with the increased applications for Twyford?

Dr. Boyson: We can look into that matter. We shall do so. My constituency adjoins the constituency in which Twyford school is situated. That is one of the reasons why, by accident, I have the figures today. There has been a great demand for the Anglican denominational education at that school throughout the whole of north-west London, and it has the approval of parents and churches in the area.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Winnick: asked the Prime Minister if she will state her official engagements for 22 March.

The Secretary of State for the Home Department (Mr. William Whitelaw): I have been asked to reply.
My right hon. Friend is attending the European Council meeting in Brussels. This evening she will be attending a banquet in honour of President Kaunda at Buckingham Palace.

Mr. Winnick: Is the Home Secretary aware of the concern at the way in which a Romanian was sent back to his own country last week without having much opportunity to see whether another country would take him in? Is it not the case that that person served many years

in a Romanian prison for offences that would not be considered criminal in a democracy? Will the Home Secretary bear in mind that the concern of the Opposition at least would be the same if we were dealing with a Chilean or a South African who was opposed to the apartheid regime?

Mr. Whitelaw: I accept at once what the hon. Gentleman said in his final remarks. I think that it is appropriate, in view of the press comments that have been made over the weekend, to say clearly what the position is. I hope that the House will allow me to do so. This country has a proud record under all Governments of providing refuge for people from many different parts of the world who are in danger of persecution for their beliefs. I shall continue to uphold our traditional policy in that area. However, we cannot grant every application that we receive. It would be quite wrong to grant applications without the most careful examination of each case on its merits in accordance with the established principles that apply to political asylum. In 1982 we granted 2,368 applications for political asylum out of 4,167 Mr. Papasoiu's case was examined with the utmost care, but, having considered all the circumstances, we came to the conclusion that he did not qualify for political asylum.

Mr. Roy Jenkins: Was not Mr. Papasoiu in this country for several months without any direct reference to the Home Secretary? What is the explanation of his apparently disgraceful treatment at the end of that period without the Home Secretary being consulted?

Mr. Whitelaw: This man was the subject of many representations, as was proper, from Members of Parliament. That is why his case was considered for a long time. The right hon. Gentleman knows as well as I do that when there are representations cases have to be considered over a reasonable period. That was done. We considered very carefully all the circumstances that were put to us. We, in the final event—I say "we" because I want to make it perfectly clear that I am totally associated with this decision—decided that in this case this man was not a genuine political refugee. That was a perfectly reasonable decision. Such decisions were made by the right hon. Gentleman as Home Secretary and by every other Home Secretary. Either they or their Ministers of State have always decided every case on its merits. That is the correct way for it to be done.

Mr. Mark Carlisle: In view of the widely reported allegations that the Romanian in question has spent nine out of the past 10 years in prison in Romania, will my right hon. Friend say when he arrived, when he was first seen, what he said about his previous record on that occasion and when he first suggested that he had spent nine out of the past 10 years in prison?

Mr. Whitelaw: I understand that he came in April 1982, was examined on various occasions after then and gave different accounts of what had happened during his time in Romania. All that he said was taken carefully into account. We have granted many applications, but we decided that he did not fall within genuine refugee status. That was a reasonable decision for us to take.

Mr. Foot: I am sure that the right hon. Gentleman appreciates that there is widespread disturbance in the House and throughout the country about this case. Will he


undertake to make a further statement to the House about it? I do not believe that the matter can be left where it is now.
Perhaps I may raise another issue that concerns his reputation and that of the Government with regard to the protection of our freedoms. Does the right hon. Gentleman agree that his Police and Criminal Evidence Bill involves so many infringements of civil liberty and elementary freedoms that the only possible course now open to the Government is to withdraw it?

Mr. Whitelaw: With regard to the right hon. Gentleman's first point, if the House decided that, on the basis of a strict and fair policy, every person who came from an eastern European country was automatically to be accepted as a political refugee, that would be a serious matter that would affect all of our immigration policy. No Home Secretary has done that. It would not be right. I have stood by what I believe to have been the practice of all of my predecessors. I have already given the number of applications for political asylum that have been granted. We face difficult circumstances and we have been generous. I ask the House to appreciate that, when it comes to granting political refugee status, extremely difficult decisions have to be made. I and my Ministers, like all Home Office Ministers in the past, have examined the circumstances carefully. We could not let everyone into Britain.
I shall now deal with the Police and Criminal Evidence Bill. It is right for the right hon. Gentleman to ask me about it. There are two clauses in that Bill that give rise to considerable anxiety. The right hon. Gentleman, who clearly has not read the Bill or anything to do with it, has said that because of two difficult clauses the entire Bill should be withdrawn. He should remember that the Bill, which is being debated properly in Committee, is intended, on the basis of the report of the Royal Commission on criminal procedure, to enable the police to bring criminals to justice more effectively. I should have thought that the whole House would want just that. The question is whether the safeguards of individual liberties are satisfactory.— [Interruption.]
If I am attacked, as the right hon. Gentleman has attacked me, I am entitled to reply. Oh yes, I am. The extra safeguards that we have provided are not understood in the House or in the country. They allow everyone the right to have his case argued before a circuit judge. If they are not sufficient, I am prepared to consider further safeguards at a later stage of the Bill. The onus is on those who dislike the Bill to admit honestly that they want to see criminals brought to justice.

Mr. Foot: When the right hon. Gentleman describes those who are not properly qualified to understand the Bill, does he include Lord Salmon, who described the intrusions into freedom that are involved in the Bill as "shocking and monstrous"? As he says that there are two clauses to which he objects, let those two be withdrawn for a start. The Opposition and the country are determined to protect the right of asylum. The Opposition have never said that everyone should be let in, but the right hon. Gentleman could not possibly have judged the matter correctly if he was in the type of mood then that he has come to the House in today.

Mr. Whitelaw: Perhaps I may ask both the right hon. Gentleman and Lord Salmon to read the Bill carefully. I

have never said that I wanted to withdraw those clauses. I have said that the safeguards in those clauses should be examined carefully. I am prepared to do that.
As to my mood and the question of asylum, I have been bitterly attacked for what I believe to be a decision—which was made after careful investigation—which fully accords with everything that we have previously done with refugees. I yield to no one in being fair and generous towards refugees during my time as Home Secretary. I hope that the right hon. Gentleman will recognise that.

Mr. Foot: We still hope that the right hon. Gentleman will withdraw the Police and Criminal Evidence Bill. If he does not, we shall repeal it.

Mr. Whitelaw: That proves to me that, if the right hon. Gentleman ever has a chance to repeal the measure, he had better read it first, because his right hon. and hon. Friends who are discussing it would greatly dislike it if all of its provisions were withdrawn. He must answer the question "Do the Opposition want the police to be enabled to pursue criminals and bring them to the courts and justice?" If they do, they should examine the Bill.

Mr. Myles: asked the Prime Minister if she will list her official engagements for Tuesday 22 March.

Mr. Whitelaw: I have been asked to reply.
I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Myles: Is my right hon. Friend aware that since agreement on a common fisheries policy was reached, employment in the fishing boat building and the fish processing industries in my constituency has been greatly enhanced?

Mr. Whitelaw: I am grateful to my hon. Friend for supporting what my right hon. Friend the Minister of Agriculture, Fisheries and Food has done.

Mr. Straw: asked the Prime Minister if she will list her official engagements for 22 March.

Mr. Whitelaw: I have been asked to reply.
I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Straw: Is the Home Secretary aware that the report of the Court of Auditors of the Common Market institutions reveals long-standing rackets among members of staff whereby messengers and secretarial assistants receive entertainment allowances of £180 a month, other staff have access to holiday camp accounts and the control of the payment to staff in subsidiary offices is so lax that the Common Market simply does not know whether the salaries being paid relate to the people who are employed? Is he further aware that those practices went on undisturbed throughout the time when the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) was in charge of the Common Market? Is he aware that they came to light only when the right hon. Member for Hillhead left the Common Market and became leader of the Social Democratic party?
In view of the serious allegations of financial mismanagement in the Common Market, what attitude do the Government take about the lack of control of Common Market institutions?

Mr. Whitelaw: I understand that the issue was discussed last night. I am sure that the hon. Member for


Blackburn (Mr. Straw) and the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) would like to get together and argue about it all again. I undertake to look into the points that the hon. Gentleman has made.

Mr. Neubert: asked the Prime Minister if she will list her official engagements for 22 March.

Mr. Whitelaw: I have been asked to reply.
I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Neubert: Has my right hon. Friend had an opportunity today to study the Young Socialists'

conference agenda, which calls for Army officers to be elected by their troops, for the abolition of the monarchy and the police force, and for the conferring of political status on the so-called IRA prisoners of war? Is this not evidence of increasing extremism within the Labour party, and will my right hon. Friend take the earliest opportunity to condemn views that are repugnant to the great majority of British people?

Mr. Whitelaw: If the Young Socialists spoke for the majority of the Labour party it would be a serious flatter, but, as I am a very kindly person, I still hope that they do not.

Statutory Instruments, &c.

Mr. Speaker: By leave of the House, I shall put together the Questions on the six motions relating to statutory instruments.

Ordered,
That the draft Supplementary Benefit (Resources) Amendment Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Legal Aid (Scotland) (Financial Conditions) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Legal Aid (Financial Conditions) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Legal Advice and Assistance (Financial Conditions) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Representation of the People (Scotland) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Douglas Hogg.]

Emphysema (Compensation)

Mr. Geoffrey Lofthouse: I beg to move,
That leave be given to bring in a Bill to provide compensation for mineworkers under the Industrial Injuries Acts for emphysema.
The House will recall that I presented a similar Bill last Session. I shall not rehash the evidence that I gave then, but I shall present new evidence to make the House aware of the shallowness of the argument presented to me in a letter from the Minister for Social Security on 3 March this year. My predecessor as Member for Pontefract and Castleford was Joe Harper—a most respected man. In 1963, Joe fought for similar legislation. He received from the Conservative Minister of Pensions and National Insurance a bromide answer that closely resembled the answer that I received recently. He was told:
This disease has been kept under review all the time by the Pneumoconiosis Research Unit of the Medical Research Council, but the fact is that up to date those concerned have been able to find no causal relationship between dust in these particular occupations and the disease."—[Official Report, 11 March 1963; Vol. 673, c. 941.]
I was told at the beginning of this month that, from present medical knowledge, cases that might be due to such employment cannot be clinically distinguished from others. That is not true. If the word "lies" was not unparliamentary, I would say, as a former coal miner, that it is a lie. The Minister also said that the matter was once again under review. I do not see this as a party matter because, following a parliamentary question in 1978 to my right hon. Friend the Member for Salford, West (Mr. Orme), I received a similar answer, although perhaps more courteous and full. He said that the matter was subject to close study or, to put it in another way, that it was under review. But that is not enough, because for some study can be a lifetime's occupation.
Research exists and is proved. The House will accept that in academic research papers are criticised by other specialist authorities, but from all that I hear and read the case that establishes that coal miners are 10 times more at risk than other members of the general public has never been challenged. It cannot be challenged. The evidence to support this is overwhelming, yet when I present it—as I did in my previous Bill—it is ignored, and I am told that there is insufficient evidence.
In the previous Session I used eight learned papers, and especially drew attention to Dr. Ann Cockcroft's research from the paper "Cockcroft et al" that was published in The Lancet in 1982. Dr. Cockcroft has more recently submitted a strong and easily understood argument that is contained in the current edition of The Lancet on 19 March and that is based on 20 learned papers. She recommends action and again suggests that X-ray diagnosis is not enough but that functional disability should also be considered. She says that panels should consider lung functioning, testing and exercise tolerance and not only radiographic evidence. In a letter to me, she says that from now on progress will come not from medical research, because research evidence exists to show that mining produces many emphysema sufferers, but only if politicians have the will to take action. We should not shirk that responsibility. I am not asking for much, simply


that the British miner should receive the same benefit as is afforded to miners in the United States of America, Canada and Australia.
I always listen to the breakfast radio programme, and recently I heard ten-minute Bills described as the Back-Benchers' soap box, which implied that this procedure was meaningless and a device to allow Back-Bench Members a chance to let off steam. Governments may believe that to be its function, but I do not. It is a chance to place before the House a serious matter, but, like much that goes on here, it is as barmy as it is inefficient. I sat outside the Private Bill Office for 13 hours throughout the night, but I did so because it is an important subject.
The matter is serious and my case is based on systematic research by several medical research teams. It concerns men in a great but dangerous industry and should not be treated lightly. Action must be taken, because we cannot allow the matter to be continually under review. Twenty years ago, Joe Harper received the answer that it was under review. For how long must sick miners be refused their rights? How many 20-year periods must pass before the House takes action?
The House should give time for my Bill and should allow it to pass to Committee, because then I could present specific medical evidence to show that miners are more at risk from emphysema than are the general public. The Minister, in the light of his reply, would have an opportunity to produce detailed medical evidence to refute my case. At worst, this would mean that his experts must do some reading. No other medical authority refutes the fact that miners are 10 times more at risk from this disease than are the general public. His advisers would have the opportunity to say that that is not true. It will be a hopeless task, but they should be allowed to have a go.
It would be monstrous not to act. Men who have given a lifetime to an important national industry and who are now sick should not be overlooked. At least let their case be considered by a Committee of the House, and let us no longer to told that the case is under review. My Bill would cost about £2·25 million, which could be found easily in the first year, if Mr. MacGregor is not appointed to the National Coal Board at a huge salary, from the industrial injuries fund without any further moneys having to be made available.
I beg the House to support my Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Geoffrey Lofthouse, Mr. Edwin Wainwright, Mr. Roy Mason, Mr. Alec Woodall, Mr. Albert Roberts, Mr. Allen McKay, Mr. Frank Haynes, Mr. Jack Ashley, Mr. Michael Welsh, Mr. Peter Hardy, Mrs. Ann Taylor and Mr. Alex Eadie.

EMPHYSEMA (COMPENSATION)

Mr. Geoffrey Lofthouse accordingly presented a Bill to provide compensation for mineworkers under the Industrial Injuries Acts for emphysema: And the same was read the First time; and ordered to be read a Second time upon Friday 13 May and to be printed. [Bill 110.]

Orders of the Day — 9TH ALLOTTED DAY

Railway Workshops

Mr. Albert Booth: I beg to move,
That this House, being opposed to the reduction in capacity of British Rail Engineering Limited which would arise from the proposed closure of Shildon, Horwich and Temple Mills railway workshops, is concerned at the devastating unemployment which would result; and therefore calls upon the Government to reject entirely the Serpell strategy for British Rail Engineering Limited and to develop a comprehensive programme for the modernisation and expansion of freight and passenger services.

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Booth: The Government are running down British Rail by starving it of the investment needed for rolling stock, signalling and electrification. The investment expenditure of British Rail has fallen from £513 million a year in 1979 to £333 million a year in 1981. Therefore, it is not surprising that British Rail orders for British Rail workshops have slumped. The slump can be seen in practically every part of the new build work in British Rail's workshops.
The number of new high-speed train locos ordered fell from 27 in 1979 to 15 in 1982. The number of high-speed train coaches ordered fell from 125 to 45 in the same period. The number of other coaches ordered fell from 221 to 97, and the number of freight wagons fell from 2.269 in 1979 to 1,140 in 1982. What is more serious for the workshops in general, and for Shildon in particular, is the projected further rundown that British Rail and British Rail Engineering Ltd. are planning.
Last week I was told that the rundown of freight wagons will continue until it reaches a level as low as 200 or 300 a year over the next two years. That is why British Rail Engineering Ltd. is proposing to close Shildon, Horwich, apart from the foundry, and Temple Mills.
This is a clear responsibility of the Government. The Secretary of State is all too fond of telling us that these decisions are for British Rail. Today, let us have some realism in the debate, and let us face up to the fact that it is the Government and not British Rail who have refused to approve the major investment proposals of the board. It is the Government and not the British Railways Board who have set an investment ceiling and then set an external financing limit that makes it impossible to attain that ceiling. It was the Government and Conservative Members who carried the legislation through the House that has ensured that British Rail's profitable subsidiaries will be sold off and it will no longer be able to co-operate in maintaining the investment programme. By their commissioning of the Serpell report and their attitude to the report, the Government have confirmed their anti-rail bias that has led us to this appalling decline in the prospects for British Rail.
The spectre of unemployment now haunts the railway workshop towns. Unhappily, the three main workshops that are the cause of today's debate are all in areas that


already suffer from high unemployment. In particular, the Horwich workshop, which is in the constituency of my hon. Friend the Member for Westhoughton (Mr. Stott), who will wind up the debate for the Opposition, is in the Wigan travel-to-work area which already has 19·3 per cent. unemployment. Almost one in five is out of work.
The Shildon workshop is in the Darlington and southwest Durham travel-to-work area which already has 15·2 per cent. unemployment. What is more, that workshop is in the Bishop Auckland labour exchange area, where unemployment has already reached 19·5 per cent. On some estimates that I have been given, the prospect is that unemployment in Shildon would reach 50 per cent. if the workshop closed.
We are talking only of the immediate effect in the workshop towns. Hon. Members should not forget the knock-on effect of closing workshops, which is considerable. In new build it is estimated that about 60 per cent. of the work is brought in from private industry. So for every job destroyed in the new build section of British Rail workshops there will be a job and a half destroyed in the private sector.
The unemployment that the Government will undoubtedly cause if they continue to pursue their policy is a tragedy not only for the workers in those workshops and the local communities but for the country as a whole. If one takes the Treasury estimate of the cost to the nation being some £5,000 a year per worker for every year of unemployment, these closures will cost the nation £2·2 million a year. One wonders what economic theory justifies creating social tragedy at public expense in the way that these workshop closures inevitably will.
It is a particularly poor reward for the workers of Shildon, who have co-operated to the hilt with management in developing Shildon as one of the finest freight wagon building works in the world. When I went to the workshops and talked to the craftsmen and stewards, it was clear that there had been the highest degree of cooperation to make possible that fine, highly productive, profitable capacity. If the workers ever believed the Prime Minister when she suggested that the way to guarantee job security was to co-operate with management, never have a strike and make the workplace productive and profitable, they have learnt a bitter lesson and will never trust such propositions from the management again. The workers were told when they engaged in the exercise of cooperation that it was inconceivable that there would ever be a time when the capacity at Shildon would not be required by British Rail. Now, a few years later, they are told that all the capacity for new build is surplus to requirements.
When I think of the times that we have listened to Conservative Members publicising with delight those rare examples of disputes on British Rail delaying progress towards higher productivity, I wonder why they were so silent about the excellent example of worker co-operation creating this valuable capacity for our country. These people have been led into believing that they were making efforts that were not only in their interests but in the interests of the local community, and in the interests of a promising future for British Rail. They are now seeing that promise turned into a prospect of the most appalling decline.
The area of decline which is of the greatest importance to Shildon is in freight services. After 30 years of decline in its freight services, British Rail planned a massive comeback for the 1980s. In the preceding 30 years, the railways' share of the combined road and rail freight movement went down from more than half to a stage where lorries were carrying five times as much as trains. That was the measure of the decline. British Rail planned enormous expansion of modern freight services in the 1980s. I have here the beautiful glossy brochure in which British Rail announced how it would expand Speedlink. It said:
There are firm plans for continuing expansion to provide an even better range of services to meet the needs of the '80s.
This is the publication in which British Rail talked of the
big traffic switch to Speedlink".
Ironically the part which refers to tailor-made wagons now reads:
So extensive and specialised are the transport needs of industry today that even British Rail's large fleet of freight wagons cannot meet every requirement.
Here we are, just a few years later, debating the closure of the finest freight wagon building capacity in this country and probably in Europe.
The planned expansion is forgotten. British Rail is getting out of wagonload traffic as fast as it can, apart from what remains of the Speedlink network. British Rail's tonnage of freight carried has fallen from 22·8 thousand million to 12·2 thousand million. Of course, we know that part of the fall has been due to the slump in heavy industries. But if we run down our capacity to the needs of the bottom of a slump, what prospect is there for growth when we have an economic recovery? Labour policy is to stop the decline and to increase freight services. British Rail's planned expansion of the Speedlink network must take place and the investment for that must be provided.
Between 1970 and 1981 wagonload freight fell from 93 million tonnes to 17 million. At every factory which I visit I am told that it does not want to provide the storage for the amount of raw materials that would come in a trainload and then run the materials down until another trainload is due in a week or a fortnight. A factory wants the materials delivered as soon as it is ready to use them. When production is completed, the factory wants the goods carried straight to its customers. The wagonload facility is the modern need of industry. Unless that facility is developed through Speedlink, there will be an increasing decline in the proportion of freight carried on the railway system. That decline must be stopped.
Speedlink, the pride of the expansion programme of British Rail, is carrying only 2 per cent. of British Rail's freight tonnage. That was where its glorious future was supposed to lie. The lack of money for British Rail to invest in specialised freight wagons has resulted in a fair proportion of the work being transferred to other sectors, particularly the building of specialised freight wagons. Because BR has had to tell potential customers that it cannot provide freight wagons, arrangements have had to be made for them to be obtained from other sources.
Public money has been used to ensure that the wagons have come from other sources. The Government have handed out £5·1 million in section 8 grants to private firms to buy wagons from private suppliers. One wonders what those firms will think when they consider the Serpell report. Will they still have rail connections on which to run the wagons? Not only has £5·1 million of public money been handed out to private owners to buy wagons, but


banks and finance houses have been told by the Treasury that they can offset money provided for this sort of construction in the private sector against corporation tax on a lease-back basis. So public money is being used on an appreciable scale to ensure that wagons will be built by private manufacturers for private ownership to be run on British Rail's services. As a consequence, more than 80 per cent. of the wagons have been built in private workshops.
Are we surprised that we are now debating a cutback of British Rail's engineering capacity? If British Rail was allowed to compete fairly, there is little doubt that Shildon would have plenty of orders. However, British Rail is handicapped by a Government who have a doctrinaire attachment to handicapping nationalised industry while aiding the private sector.
The development of Speedlink, which needs to be brought about quickly, will increase the need for special wagons and therefore put the Shildon workshop at a further disadvantage. In the past Shildon has competed successfully in the making of specialised wagons. It has built them profitably and, if allowed, could do so again. Unless we can expand modern rail freight services such as Freightliners and Speedlink and give the customer the opportunity to hire a freight wagon to carry his product as easily as he can hire a lorry, there is little prospect of getting a sensible balance of freight movement between rail and road.
On the passenger side, there is a dearth of work in the building of passenger locos and passenger coaches, although clapped-out rolling stock is being used to try to maintain services. Many of the electric and diesel multiple units on the feeder services, which are the backbone of the commuter services, should have been replaced years ago. It is a tribute to railway workshops that they can keep them running at all. Over 66 per cent. of the electric and diesel multiple units are between 20 and 30 years old and were built to a design which was intended to have a specialised life of about 10 years.
The closure of railway workshops is only the forerunner of service cutbacks. We know it in the north-west where we have been informed by British Rail that sleeper services will be withdrawn because it cannot afford to replace the sleeper coaches or even have them refurbished. That work would have gone to a British Rail workshop. That shows the link between the closure of workshops and the cutback in services.

Mr. Bob Cryer: Does my right hon. Friend accept that, because of the marked decline in and current slow production of high-speed trains, HSTs are often doing 1,000 miles a day and are doing so much work that they are not maintaining the high standards of reliability that they achieved when they were introduced? The demand is for more HSTs so that the existing ones may have a slacker schedule.

Mr. Booth: My hon. Friend has raised an important point in connection with the workshop programme. Not only has the new build been cut back, but so have the overhaul and refurbishment programmes. The British Railways Board—some of its members must be capable of doing double-backward somersaults, because they signed a document at the beginning of 1981 which said that they could not continue with the present level of investment without a rundown, and some of them are still serving as

members, in spite of the lower investment now—said that if the investment programme were maintained at the then level the availability of main line locos over a decade would fall to 50 per cent. Who can run a railway with only 50 per cent. availability of main line locos? Incidentally, the board also predicted that it would have to take about 2,000 track miles out of use and put another 800 miles under speed restrictions. That was at the then level of investment, which has been cut since that time.

Mr. Ron Lewis: Does my right hon. Friend agree that the locos now running on British Railways are not being adequately serviced, in that they are continually in use?

Mr. Booth: It is clear that on certain services it is impossible to maintain a scheduled service with the existing locos, given that they were subject to the normal maintenance cycle. That has meant in some cases that the services are provided by locos which were not designed for that service, and in other cases that locos are run for longer periods. However, the Serpell recommendation is that too much is being spent on maintenance and that experiments should be conducted to see whether maintenance standards can be lowered. What Serpell is saying today is what the Government are thinking now and what the Government would say tomorrow if they get another electoral endorsement—highly unlikely, I admit, but it is a possibility that we must take seriously.
We are seeing the tip of the iceberg, with the closure of the workshops. It will lead to closure of services, and subsequently to the closure of the railway network. I believe, therefore, that the Serpell approach to British Rail Engineering should be rejected by this House, as it was rejected by the British Railways Board. In the rest of the world, railways are being developed. This country is being left behind in that development. British Railways is meeting more of its costs from revenue than almost any other railway system and, as a result, the price of using British Railways makes it the most expensive railway system in Europe. Our investment in railways is the lowest in Europe.
The Labour party's policy is to invest in electrification and in the development of modern freight services. In doing so, we believe that we shall not only improve our transport system but make a sensible and valuable contribution to the regeneration of our country's economy. If the Government continue with their present financial policies, Shildon, Horwich and Temple Mills are only the start, and the replacement programme that will be left will not be sufficient to fill the remaining workshops. Then there will be even more closure proposals.
The Government are master-minding a double tragedy. They are killing the industry which we shall need to modernise our transport system, and simultaneously they are dashing the hopes of those who, by their labour and co-operation with the railway management, have developed a superb railway manufacturing and maintenance capacity. Their reward from the Tory Government for doing that is to have the misery of unemployment visited upon them.
I therefore call on the House to support our motion and to reject the Government's amendment.

The Secretary of State for Transport (Mr. David Howell): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
recognises the need for British Rail Engineering Limited to rationalise its workshop capacity in the light of changed requirements; and supports vigorous and constructive measures by all concerned to promote alternative and durable employment in the areas affected.
It is many years since this House has had an opportunity to discuss railway workshops, now in the form of British Rail Engineering Ltd., in prime time—so to speak—although, of course, there have been a number of Adjournment debates over the years, arising out of particular closure decisions. I do not resent or regret the opportunity to discuss the railway workshops and the developments that have given rise to the Opposition motion.
First, it is ironical that, as the right hon. Member for Barrow-in-Furness (Mr. Booth) well knows—he is very familiar with the investment programme and the freight building capacity at Shildon—the outcome and prospect of closure at Shildon arises not from low investment but from a massive programme of high investment in the new, air-braked freight wagons to which he referred. Moreover, it is British Rail policy, as the right hon. Gentleman again well knows, to build up to a level of 22,000 air-braked freight wagons. That has now been achieved. It is also BR's policy to move away from the old vacuum-braked wagons.
The present number of wagons will fall considerably. The right hon. Gentleman knows, as do all right hon. and hon. Members who are familiar with railway equipment and supply, that these new air-braked wagons have double the capacity, carry 29 tonnes, have vastly greater utilisation and higher speeds, and can be run at 75 mph over the track, instead of 45 mph, and that the demand for railway wagons has dropped to a minimum level as a result of the high investment in railway wagons.

Mr. Peter Snape: Will the Secretary of State say what difference will be made to rail freight carriage by his recent agreement to 38-tonne heavy goods vehicles on our roads?

Mr. Howell: I believe that it will be very small, but we are talking about closures that result from British Rail's present needs and the present assessment of BR's need for freight wagons in the future. British Rail tells me that it will need probably not even as much as 150 wagons a year over the next three years, and perhaps rather more after that. Shildon's capacity is 1,500 new freight wagons a year. As I said, the new wagons have twice the capacity of the old ones. They can be utilised four times as much by better handling and better computer control of wagon movements. So, on that score alone, demand for railway freight wagons has dropped by up to one-eighth of what it was. The right hon. Gentleman and his hon. Friends may say—I would join them—that that clearly creates a major change in the market for freight wagons. Of course, it does, but it is a technological change resulting from higher investment. The closures that are now being discussed at Shildon and Horwich result from a higher investment programme. There was no recognition of that fact in the right hon. Gentleman's emotional comments.
I am the first to recognise, and I agree strongly with those who say it, that the men at Shildon have superb

skills. They can make any type of wagon, and they have done so. The finish and the accuracy are excellent. Nevertheless, the wagons are simply not needed on the scale of Shildon's capacity.
The right hon. Gentleman spoke about specialist wagons. I do not recall whether he said anything about exports, but I should like to say a word on that subject. When the pattern of British Rail's needs began to unfold, with its greater reliance on freight wagons and the decline in its demand for the type of wagons that Shildon provided, I looked, as did British Rail and British Rail Engineering, at the possibility of new markets overseas. In one case, the Government helped to secure an order. Here again, the size of the orders—for instance, the order from the Congo for 115 wagons—does not begin to match the large capacity at Shildon, which is a single-purpose works, was developed as such, and now has a capacity far in excess of anything that British Rail will need.
The truth is that the decision to reduce the whole United Kingdom wagon-building capacity has become inevitable. The right hon. Gentleman knows that perfectly well. He also knows—and if he does not, he should now acknowledge it—that if BREL does not streamline and rationalise itself it will put the whole British Rail engineering business at risk. Why? Because it vastly increases the overheads. It is estimated that to keep Shildon open and maintain the Horwich repair works will increase the overheads on British Rail engineering by £20 million.
We are moving into a world where it will be absolutely essential for British Rail Engineering to compete in export markets and in the sort of areas to which the right hon. Gentleman has referred, including specialist wagons and other rolling stock. I do not see how he can argue at the same time that a business that will have to compete to secure the orders we all want to see should retain round its neck this millstone of an additional £20 million a year of overheads.
Imagine what would happen if we were to follow the advice which is not, admittedly, in the Labour motion but is in the amendment tabled by the Social Democratic Party, to the effect that Shildon be kept open. One effect would be that the repair work which, at present, BREL tells me, it wants to centralise and concentrate at Doncaster would not go there. Doncaster would have to keep the locomotive work, which, on BREL's present plans, ought to go to Crewe. The unemployment would therefore occur at Crewe.
Unemployment cannot be avoided in the conditions that I have described of completely different market requirements. Unemployment is bound to come. Does the right hon. Gentleman just want it to be pushed from one area to another, or does he want to see a serious attempt made to put BREL into competitive shape for the future? If he wants the latter, he should adopt a ra0074her different approach from the one that he seems to be taking and that the right hon. Member for Ebbw Vale (Mr. Foot) seemed to take when he visited Shildon, which was that, somehow, Shildon works could be kept open even if there were no demand for the freight wagons.

Mr. Mike Thomas: If the right hon. Gentleman takes the view he does, why did he and his officials twist the arm of British Rail to make the proposal it did on 9 March to do exactly what we


propose— mothball the main works, keep some men on wagon repair and breaking up wagons at Shildon after 1984 and review the position after two years?

Mr. Howell: Neither I nor my officials twisted British Rail's arm at any point. This is a decision that has been left to British Rail and BREL, to handle the whole question of rationalising British Rail's engineering capacity throughout the country. There is no question of ministerial or official arm-twisting in the matter.
The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) and his right hon. Friend the Member for Stockton (Mr. Rodgers) have said that they would keep the Shildon works open. I believe the latter would keep the works open as part of a commitment to his party's reflationary programme. That seems to be the position of the Social Democratic party.

Mr. Mike Thomas: rose—

Mr. Howell: I want to turn in a moment to the kind of damage that I believe that kind of political opportunism does to the future capacity of British Rail Engineering and to the people of Shildon but I will let the hon. Gentleman intervene once again and for the last time.

Mr. Thomas: I think the Minister will understand why I want to pursue this point. If it is the case that he and his officials did not twist British Rail's arm to make this offer, why does British Rail tell me that it wishes to close the Shildon works and does not wish to pursue the course of action proposed here?

Mr. Dennis Skinner: And if the right hon. Gentleman cannot tell him, ask Tony Cook.

Mr. Howell: I do not think I have ever before agreed with a sedentary intervention by the hon. Member for Bolsover (Mr. Skinner) but this afternoon I shall make history by doing so.
The hon. Member for Newcastle upon Tyne, East is ascribing to me responsibility for events that did not occur and to British Rail an attitude that it has not taken. Two sets of politicians have cast doubt and confusion on the situation, some belonging to the party of the hon. Member for Newcastle upon Tyne, East and the others to the party of the right hon. Member for Barrow-in-Furness. Before I turn to some of the damage they have done in getting in the way of job creation and constructive approach to these problems that I believe to be necessary, I shall return to the main theme of my speech. I was asking the right hon. Member for Barrow-in-Furness whether he was aware that if Shildon were to be kept open there would be difficulties elsewhere in British Rail's engineering capacity and that, in particular, there would be a possibility of unemployment at Crewe, and whether that was what he wanted.
Perhaps I can say a word about the private wagon builders to whom the right hon. Gentleman also referred. If BREL keeps open uneconomic works, because of the great contraction in the wagon freight market—and we are not just talking about the home market—other works would have to fold. There are private wagon works throughout this country, at Wakefield, Cardiff, Gloucester, Stafford, Birmingham, Wigan, Heywood and elsewhere. Why did the right hon. Gentleman take a view that seemed to imply that he really did not care about the workers in those wagon works? Their interests and their future are just as much involved. If British Rail maintains uneconomic capacity with substantial overheads that it

cannot possibly fill with future orders, the backlash falls on the works in the private sector. I would take the protests and promises of Members on the Opposition Benches much more seriously if we heard an occasional word of support for the workpeople in the private sector of the industry.

Mr. Richard Needham: May I help my right hon. Friend? It is quite obvious why Opposition Members are not talking about the private factories involved. It is because there does not happen to be a by-election in any of the areas where these factories are situated.

Mr. Howell: As I began by saying, it is very many years since Opposition Members have felt moved to bring this subject to the Floor of the House of Commons on a Supply day. One must query their motives in raising this issue at this time in this way.

Mr. Booth: Will the Minister just recall for a moment that I did talk about the effects of the cutback on the private workshops and that I said that, as far as new building investment was concerned, the cutback would probably destroy one and a half times as many jobs in the private sector as in British Rail workshops? Will he therefore acknowledge that I did talk about the effect on the private sector and will he tell us why he has made no reference to the massive reduction of investment and its effect on British Rail's workshops work? Does he contend that had he maintained the investment level inherited from the last Government there would have been anything like the present crisis in the workshops?

Mr. Howell: The reason why I have not dealt with the second point is that I have not yet come to the figures for investment, but I can say now that many of the right hon. Member's propositions are wholly misleading and not founded on fact. There is a much more constructive approach to the need for BREL to rationalise its capacity than has been taken by either him and his right hon. and hon. Friends or Members from the other political parties represented on the Opposition Benches. That more constructive approach is exemplified, for instance, by the attitude of the local district council at Shildon, which has indicated that a positive and co-ordinated effort is now required to create new jobs and to meet the problems thrown up by the prospective closure of Shildon. The Sedgefield district council will be centrally involved, as will the regional offices of the Department of Industry and the Department of the Environment and the Manpower Services Commission and BREL itself. All Government agencies which can help will be working with BREL and others locally to stimulate new jobs.
It will be difficult. There can be no naivety of the kind shown by some hon. Members when they visited Shildon about waving a magic wand and pronouncing that jobs will be re-created. It will be difficult, but I believe that the opportunities exist, especially now that we are unwinding the Labour party's tax on jobs and creating unparalleled new work incentives, as my right hon. and learned Friend the Chancellor of the Exchequer announced in his Budget. BREL has nominated a director specifically to help with this task. It is also prepared to provide financial resources. Work of the right kind is taking place to provide jobs and enterprises to replace the jobs that are bound to disappear because of lack of demand.

Mr. Ted Leadbitter: rose—

Mr. Howell: I should like to make one more point before giving way to the hon. Gentleman. I have to say to the right hon. Member for Barrow-in-Furness, to his right hon. Friend the Leader of the Opposition, sitting beside him, and to the hon. Member for Newcastle upon Tyne, East, who speaks for the Social Democrats, that when they or their representatives went as political visitors to Shildon and gave the impression that there is an alternative to closure, what they did—this will be the case so long as they go on doing it—was to ensure further delay and a prolongation of the time in which people will continue to resist and not adopt a constructive response to the unemployment position. So long as people go on feeling that closure can somehow be avoided, there will be difficulty in getting a constructive response.
By far the best service that they, or their political representatives or candidates, could render would be to adopt the view that I have stated in the last few minutes. By working together, the local authorities, British Rail Engineering, the agencies of the Government, the local community, enterprise trusts and other bodies can make a real start in providing jobs and work for the future. If right hon. and hon. Gentlemen intend to continue raising totally false expectations and giving promises that cannot be fulfilled, all they are doing is prolonging the difficulty and delaying the day when we can get started on a decent job programme in the area.

Mr. Leadbitter: The Secretary of State is in cloud-cuckoo-land. He talks nonsense. Is he not aware that he does not have to initiate the co-operation between all these authorities in the northern region? We are experts at it. Our experience is that the promise that the Secretary of State makes about new jobs is not fulfilled. The result of working on the principle that he has espoused is that, in Hartlepool, unemployment has continued to increase. One man in three is out of work. Why does not the right hon. Gentleman stop talking such utter rubbish?

Mr. Howell: I recognise the hon. Gentleman's deep feeling over high unemployment in Hartlepool—

Mr. Leadbitter: The right hon. Gentleman has no feeling.

Mr. Howell: —but we are not talking about that. We are discussing the problems at Shildon. I have made clear that the closure results from high investment. The need is to find new jobs and to create new businesses in the area. I believe that this can be done, but not while totally false expectations are raised for short-term purposes and apparently to buy votes in a way that passes all standards of normal political opportunism, even though we see plenty of it in this House.

Mr. Mike Thomas: Does the statement made at the shopmen's national council meeting on 9 March represent that kind of opportunism?

Mr. Howell: I do not know the statement to which the hon. Gentleman keeps referring. If it relates to the claim that British Rail had its arm twisted by Ministers and officials, it is totally untrue and without foundation.
The right hon. Member for Barrow-in-Furness has asserted that the problem stems from lack of investment and financial support. I should like to deal with the facts relating to investment and financial support. I take the two sets of years, 1975 to 1979, when the right hon. Gentleman had some responsibility, versus 1979 to 1983.

The facts fly directly in the face of everything that the right hon. Gentleman stated. They are perhaps worth repeating slowly and clearly. During the period 1979–83, grant support to British Rail from the Government was double, in cash terms, the sum provided from 1975–79. The amount was £2,600 million against £1,300 million. Obviously, expressed in constant money terms, it is not double. However, it is still significantly larger.
Under this Government, substantially more social grant has gone to British Rail in the same period than during the four years under the Labour Government. That is a fact. It needs to be repeated clearly. Again and again, the right hon. Member for Barrow-in-Furness and his right hon. and hon. Friends ignore that fact, which does no service to British Rail. They make assertions about international comparisons that appear not to be right. Incidentally, the right hon. Gentleman is, I believe, wrong about the Bundesbahn. There is evidence that it gives a smaller amount of support in relation to total revenue than we do. That is confirmed by recent figures that appeared in the Financial Times. As the right hon. Gentleman knows, it is difficult to obtain the actual figures from the Governments concerned.

Mr. Les Huckfield: rose—

Mr. Howell: I have given way so often that I think I shall now push ahead and complete my speech. The figure for social support through the public service obligation is £2,600 million over the four years versus £1,300 million over the previous four years. I hope that the right hon. Gentleman will accept that figure. It is fact.
I come now to the investment figure. The right hon. Gentleman and his Opposition colleagues have made great play of the consequences of the fall-off in the level of investment. I have explained, in relation to Shildon, that it is not the fall-off in the level of investment but the maintenance of a high level of investment in air-braked freight wagons that has led to the fact that the Shildon capacity cannot be used. I shall give the right hon. Gentleman the overall figures. In the four years between 1975 and 1979, investment in British Rail was £1,100 million—in fact, slightly over at £1,114 million. In the four years 1979–83, it has been £1,600 million, a considerably larger sum.
If the right hon. Gentleman asks for those amounts to be expressed in constant money, I shall do so. It is certainly correct that, in constant money terms, the figure of £1,600 million represents a lower sum than the figure of £1,100 million. [Interruption.] Not by very much, but it does. If the right hon. Gentleman asks why investment is down, I think that even as he asks the question he knows the answer. He knows that last year, as a result of the ASLEF dispute, £170 million was bled out of the system during the summer that could have gone into investment. Labour's Front Bench Members are the last people on earth to be lecturing the Government in complaining about lack of investment in British Rail.

Mr. Les Huckfield: rose—

Mr. Howell: No, I shall not give way. Mr. Huckfield: Let us have real figures.

Mr. Howell: When that money was bleeding out of the system, they were actively inflaming the situation. We do not want lessons from them on the kind of investment that they think should go into British Rail.
It is true that, since I last spoke in the House on British Rail matters, ASLEF has agreed to operate the Bedford to St. Pancras electric passenger line. That is welcome although many members of the travelling public will, I am sure, say "About time, too". We shall not take lessons from the Labour party on how to support our railway. If its example of support for rail services is of the kind given last summer, it is no help at all. It is the kind of support that they could do without.
The situation at Shildon arises not from lack of investment but from the consequences of investment. That needs to be stated again. I make no apology for repeating it. The right hon. Member for Barrow-in-Furness could not bring himself to state what he knows to be the facts. The transition is, of course, painful. The workpeople affected deserve, and are fully entitled to, every conceivable effort to help them and their families and their communities. The Opposition motion does none of that. By purveying the idea that Shildon can somehow be kept open, the motion is pure escapism and pure opportunism. The same applies to the amendment of the Social Democrats. Neither will help British Rail Engineering in the slightest degree to procure more jobs or more orders. Neither will help with finding and creating more jobs in the areas concerned. I suspect that neither will help towards achieving the aim that I imagine lies behind them, that is, promoting the Labour and SDP candidates at Darlington. Indeed, as far as I can make out the Labour candidate is busy trying to disengage himself as fast as he can from the policies and views of the Left wing in control of the Opposition Front Bench.
For these reasons, I can see nothing in the Opposition motion that would bring any help to the people concerned or the workers concerned in these closures. No one gets any joy from seeing these closures. They arise from the high investment in air-braked freight wagons. It would have been far better for British Rail Engineering and the future of the railway system if the motion and amendment had never been put forward and it would be far better now if they were withdrawn.

Mr. Derek Foster: There will be deep resentment in my area at the Secretary of State's suggestion that there has not been a constructive response to this proposal. The district council, the town council and the county council—all Labour-controlled—and I have worked unceasingly for the past 12 months to develop a constructive response to this closure, and I hope that the right hon. Gentleman will recognise that.
The Prime Minister and the Government ceaselessly extol the virtues of what they call the old values, by which I take them to mean thrift, hard work, sturdy independence, self-reliance, family life, the sense of community and pride in the community. That describes almost completely the community of the township of Shildon of some 14,000 people. Those are values which we, too, respect. But how can a man stand on his own two feet and be self-reliant when he has not got a job? If the Prime Minister and the Government really want to preserve those values, if they really mean what they say and this is not just empty rhetoric, they should do something to save the community of Shildon. But they stand idly by and do nothing while Shildon is threatened with long-term unemployment, poverty, the destruction of the whole community and the break-up of family life.

They make great play of being the party of the family, but long-term unemployment and poverty have done more than anything else to break up family life in this country.

Sir Frederick Burden: Will the hon. Gentleman give way?

Mr. Foster: Not at the moment.
The work force at Shildon is a most valuable asset, first, because of its engineering skills, which are acknowledged by everyone, and, secondly, because people have devoted the whole of their lives to the rail works there. Indeed, sometimes as many as three or four generations are involved. Railway production has been going on at Shildon for over 150 years. It is a valuable asset because of the workers' pride in their product and their commitment to the rail works. It is a valuable asset, too, because, as my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) said, the workers have been cooperative, adaptable and flexible—everything that the Government say they ought to be.

Sir Frederick Burden: rose—

Mr. Foster: No, I shall not give give way. Many hon. Members want to speak in this debate.
The work force has been described by British Rail Engineering Ltd. as the jewel in the crown. It has been described by a former managing director of British Rail Engineering as the most efficient wagon works in the whole of Europe. It has been held up as an example to other British Rail Engineering works of how co-operative and flexible they ought to be.

Sir Frederick Burden: rose—

Mr. Foster: No, I shall not give way.
Yet, in spite of all that, the flexibility, co-operativeness and adaptability of the workers is being thrown back in their faces.
Because of the closure of Shildon, the workers will find themselves without jobs. Those workers have not priced themselves out of their jobs, as the Government say on so many occasions. This is not caused by union bloody-mindedness. On the contrary, they have done everything that has been required of them.
The reason why they are out of work, we are told, is that the market has changed. That is true. We acknowledge that the market has changed. What markets have survived this recession? That, of course, is a material factor. We acknowledge that there is a more efficient way of using wagon works. We have never denied that.
What has been the growth of the private sector fleet? When I raised this question before, there was some confusion. The Secretary of State admitted that he was getting confusing reports from British Rail and British Rail Engineering. It seems to me that there has been a significant growth in the private sector over these past years while the British Rail fleet has been reducing. This has been partly because British Rail fleet clients have been buying wagons themselves, and that has been partly because of the tight investment limits placed on British Rail by the Government. I admit that it has also been partly because of good marketing sense. Of course, British Rail clients have begun to lease wagons—as we have been over this ground before I shall not go into the details—and that is not open to the British Rail Engineering works at Shildon. Therefore, we now find that we need small-batch, more specialised production.
What incenses me about this is that British Rail Engineering has almost entirely written off the idea that the Shildon works can carry out and compete for this kind of work. By extolling its flexibility and adaptability, however, it is pointing out that Shildon is capable of doing that kind of work, or indeed any kind of specialised production work that is required for today's market.
For a long time the over-valued pound did our manufacturers a great deal of damage. We discovered that other countries were prepared to subsidise their exports through their overseas aid programmes. In saying that, I acknowledge the help that the Secretary of State gave in securing the Congo order. We find that European competitors, too, often subsidise their rail wagon production through subsidised coal, transport and steel.
There is still a great demand for wagons. For instance, in my constituency 1 million tonnes of opencast coal is carried by road. The district council and I and British Rail Engineering have brought out schemes at Shildon which would enable it to be carried by rail, but these have not met with the proper response from the NCB.
I understand that British Steel is applying for a section 8 grant—public money—in order that wagons can be bought to transport scrap. Those wagons are going to be bought in the private sector. Again, public money ends up subsidising production in the private sector in competition with the rail works at Shildon.
Furthermore, in the past two or three days I have discovered that British Steel is exporting beams of steel to the continent in wagons imported from West Germany. What efforts are being made to make certain that wagons carrying British Steel products—the products of a nationalised industry—are built in this country? None, it seems.
Even if we were to concede that the market has changed and been reduced, it would still be there if the Government were to listen to sense and have an integrated transport policy in which rail played its full part. When we consider our European competitors and the percentage of traffic that they transported by rail, we begin to wonder why so little goes by rail in Britain.
I understand that official EC policy is for the integrated transport policy that we are advocating. Conservative Members of the European Parliament have voted for such a policy, yet Conservative Members in the House do not see the sense in that. It makes a great deal of sense. It would stop the damage being done to our buildings and villages and the slaughter on the road and would conserve fuel. Those are well-acknowledged arguments for transporting more freight by rail. The market would be there if the Government were to invest sensibly in British Rail along the lines advocated by both the unions and Sir Peter Parker in the rail policy documents. If that were done, there would be a full workload, not only for Shildon but for all the other wagon works.
Because of its adaptability and flexibility, Shildon is capable of producing other products. One would have thought that the business brains in the Government and in British Rail—people imported on to the board from the private sector—could devise an alternative business strategy for works such as Shildon to establish a growth pattern in place of this vicious cycle of decline. It seems that the people running the nationalised industries are experts in managing decline, with no imagination to look

for diversification within their industries. Shildon's present workload could be used as a base upon which to diversify into other products. Every engineering process that is carried out at Shildon is capable of producing many saleable goods.
We throw down a challenge to the Government. The conveners, the district and county councils and I have always wanted to be constructive. Let us together work out a business strategy that would allow Shildon to prosper. If we could do that, not only would the Shildon works prosper, but that prosperity would spill over into the surrounding areas as well. Indeed, it might even become a growth point for south-west Durham instead of being a place that will accelerate its decline. It might become a new weapon in the armoury of regional development. Instead of accepting that the works must close and spending about £10,000 a job to bring new jobs in over a five or 10-year period—that is what we are talking about—we should save the existing works and its workload and diversity its products. Why do the Government not see the sense in such a policy? The public sector costs of closure are estimated this year to be £20 million at Shildon alone. It is estimated that to attract a comparable number of jobs would cost about £40 million. The Secretary of State said that £20 million would be saved, but a lot of Government money will have to be spent as a result of the closure.
Where were the Conservative and Social Democratic Members of Parliament when, on two occasions, 10,000 people marched through Shildon because the community was so incensed by the proposed closure? Where were they when 1,000 people marched upon Westminster and lobbied the House against the closure? Where were they when 5,000 people recently marched through the town of Darlington? Darlington vibrates with the sound of Tory crocodile tears splashing into their gin and tonics. One can also hear the quiet sobbing of the Social Democrats in Darlington as they eat their delicacies and wash them down with claret. But that crying is the result of fluffed orders rather than the demise of Shildon.
Only the Labour movement has shared in Shildon's struggles. Only the Labour movement has fought and marched alongside the work force. Only the Labour movement believes in them, their skills, values and way of life. Only the Labour movement wants to share power with them, and only the Labour movement can save those works.

Mr. Mike Thomas: We have heard from the hon. Member for Bishop Auckland (Mr. Foster) a sober and responsible account of Shildon's position. It was considerably more to the point and impressive then the account given by the right hon. Member for Barrow-in-Furness (Mr. Booth). Not even the Secretary of State, in the run-up to a by-election, seemed able to bite on the bullet and tell us the facts about it. We must look at the real reasons why it is proposed that jobs in Shildon should be lost. Then we should see whether anything practical and sensible can be done about it. I know that the hon. Member for Bishop Auckland has thought about that a great deal.
Why will the jobs go? The first reason has hardly been mentioned up to now, and that is that the railways are changing; they are using fewer wagons. The number of wagons dropped from 1 million when the railways were


nationalised to 500,000 or 600,000 15 or 20 years ago. There are now 65,000 British Rail wagons and perhaps that figure will be roughly halved in two or three years. We might not like that. It might not be good news for those who work in Shildon, but it is irresponsible to conduct a debate without mentioning it. It is a salient fact that the market that has previously been supplied by Shildon has declined. We must not duck that.
We must also be clear—again the right hon. Member for Barrow-in-Furness was less than honest about this—that, although more investment is necessary, the more modern the equipment on the railways, the less maintenance work will be required. The right hon. Gentleman knows that 80 per cent. of the work in the railway workshops is spare part construction and maintenance, not new build. Even with a substantial programme of new investment, that proportion would not alter significantly.
I travelled to Braintree the other day in a carriage that must have been constructed shortly after the first world war, certainly not long after the second world war. God knows, we need new investment. Every time we produce a new multiple unit, locomotive or wagon we produce, certainly in the short run, less maintenance work, not more.

Mr. Booth: Will the hon. Gentleman accept that the logic of using the TOPS computer with a modern fast—running railway wagon, is that many more tonne miles a year will be run by each wagon and that means more maintenance, not less?

Mr. Thomas: I am sorry to have to tell the right hon. Gentleman that he is wrong about that. Of course, wagons are used more intensively, but at the end of the day less maintenance is required pro rata, and he knows that as well as I do.
The second reason for the problem in the railway works—

Mr. Harold Walker: rose—

Mr. Thomas: I shall give way in a moment.
The second reason for the problem in maintaining rail workshops at their existing level is the decline in our basic industries such as steel and coal which are closely related. We know that a large part of the railway freight traffic is in coal and we know that when the coal and steel industries are suffering British Rail's turnover does not prosper. Indeed, it has declined. Therefore, the world recession has produced part of the problem, and that should not be avoided by the right hon. Member for Barrow-in-Furness and his colleagues. The Secretary of State also should have mentioned it.
The third reason—here I fully agree with the right hon. Member for Barrow-in-Furness—has been the failure to plan ahead and to invest accordingly.
For once the dividing line of 1979, which for understandable reasons the official Opposition pick upon, is significant. According to the Serpell report, after 1979 the amount of money made available for investment, and the amount that British Rail was taking up, declined substantially in real terms. The figures, expressed in 1982 prices, are £513 million in 1979, £401 million in 1980, £333 million in 1981 and £300 million in 1982.
There has been a decline in investment. There is a limit to how far that investment would have produced more

maintenance work for the railway workshops. Hon. Members must be careful not to make the automatic assumption that more investment means more work in railway workshops. It is arguable that it might mean less. Nevertheless, more investment would mean more new build work than is currently being planned. The Government must take a share of the responsibility for that state of affairs.
The fourth reason for the decline in employment in the railway workshops—it has been skated over by both of the old parties—concerns trade union attitudes. I accept that the record at Shildon is extremely good. I am sure that the account given by the hon. Member for Bishop Auckland was accurate, not least because it met with the agreement of other hon. Members who have spoken on the subject. Union relations at Shildon are not the only problem. Strikes affect freight and passenger traffic and, therefore, the demand for coaches and wagons. There are problems of restrictive practices and overmanning.
The recently settled dispute involving the Bedford-St. Pancras line is a classic example of the way in which the attitudes of the railway trade unions, especially ASLEF, have discouraged investment and traffic. It is to the eternal shame of the Leader of the Opposition that during that dispute, which did great damage to the railways, he could do nothing but give his tacit support to what everyone knew and accepted was the most outrageous and damaging behaviour on the part of a small group of train drivers, because the trade unions pulled the noose tighter and tighter round the neck of the Labour party.
Those who work in the railway workshops will probably pay the price for the incompetence and irresponsibility of our political system over many years. This debate has been initiated not because of the proposed closure of three railway workshops or the lack of investment in the railway industry, as the right hon. Member for Barrow-in-Furness asserted, but because of the Darlington by-election. Had it not been for the Darlington by-election, there would not have been a debate.

Mr. Roger Stott: I am sure that the hon. Gentleman recognises that the official Opposition are allowed a certain amount of Supply time. This is the earliest opportunity that the official Opposition have had to debate this issue since the closure of the three workshops was announced. The debate has nothing to do with the Darlington by-election. The closure decision was taken four weeks ago and this is the first opportunity that the Labour party has had to debate it in the House.

Mr. Thomas: I am tempted to remark, Mr. Deputy Speaker, that if you believe that you will believe anything. The remarks of the hon. Member for Westhoughton (Mr. Stott) do not deserve a serious answer. The cause of this debate is the Darlington by-election. The hon. Gentleman protests too much.
It is a little galling that the Social Democratic party should be accused of opportunism by the Secretary of State. Despite his protestations, the truth is that there was no suggestion of the type of reprieve that is proposed in part for Shildon until after the Bermondsey by-election. Suddenly, informal discussions commenced in the week beginning 2 March or thereabouts between British Rail Engineering Ltd. and the National Union of Railwaymen to find out whether something could be done about


Shildon. That just happened to be the week—surprise, surprise—when hon. Members knew the date of the Darlington by-election and when the writ would be moved. There was a meeting on Wednesday 9 March which the Secretary of State told me he had nothing to do with. However, as it occurred a few days previously, and British Rail did not seem to have any intention of producing those proposals until then, and as the only change in the intervening period was the announcement of the Darlington by-election, we must take his denials with a pinch of salt. At that meeting proposals were put forward that provided a basis for some progress as it was stated that a limited presence of 260 staff would remain at the works employed on breaking up surplus wagons, wagon repair, and manufacturing drop stampings and forgings.

Mr. David Howell: rose—

Mr. Thomas: I shall give way shortly.
In addition, it was thought that it might be possible to employ some further workers on wagon repairs or to allocate jobs at Doncaster to men coming from Shildon. British Rail proposes—

Mr. Harold Walker: rose—

Mr. Mike Thomas: I shall give way when I have finished what I am saying.
British Rail proposes that £250,000 should be given to the Sedgefield-Shildon Enterprise Trust—the hon. Member for Bishop Auckland has played an honourable and worthy part in getting that off the ground—to establish whether something could be done, as it was euphemistically termed, to "cushion" the consequences of the closure of the Shildon works.

Mr. David Howell: I am grateful to the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) for having given way. His sentences are so long that it is hard to know when to intervene. A few moments ago he questioned my word. I told him categorically that there was no question of Ministers or officials intervening with the management in the handling of the Shildon closure procedure, or with negotiations by BREL or in any way twisting BREL's arm. The hon. Gentleman must take my word and not question my word, because that is the position.

Mr. Thomas: Perhaps it is better to leave it as one of life's remarkable and outstanding coincidences. Of course I accept the Secretary of State's word. I hope that he will accept my suggestion that the timing is quite remarkable, and we are grateful for small mercies.

Mr. Harold Walker: Did I understand the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) to suggest that one way in which Shildon could be helped would be by a transfer of work from Doncaster? Doncaster is already facing several hundred job cuts. If the hon. Gentleman is advocating that, he is advocating redundancies at Doncaster.

Mr. Thomas: I am not suggesting that. I quite understand the right hon. Gentleman's concern. One of the proposals floated at the meeting on 9 March was that some of the workers at Shildon might, if wagon repair work was transferred from Shildon to Doncaster, do it there. The figure mentioned was about 100. As far as I am aware, there was no suggestion that there should be compensating

cuts in the staff at Doncaster. As I understand it, that proposal was an addition. They were not my proposals but those of British Rail. They were volunteered entirely by British Rail coincidentally in the week when it became clear that the Darlington by-election would take place.
Shildon is important to people in the north-east because it demonstrates the Government's attitude to that area, and not only in terms of the jobs that might be lost. Unemployment in the north-east, even on the official, artificially low, figures, is 207,000, with about 6,000 in the Darlington area. Hon. Members know what has happened to the steel, coal and shipbuilding industries in the north-east. Shipbuilding has lost 10,000 direct jobs in the north-east since the Conservative party came to office. The power plant industry, which the Secretary of State knows something about and which affects my constituency, has lost many jobs and there is the prospect of more losses.
The north-east is coming to the conclusion that the Government do not have the will to save jobs in the area. They took an interest only when the Darlington by-election arose and the Government thought that there was an outside chance that they would win it. Previously, they had thought that there were no seats to be won in any shape or form in the north-east, so why bother about it? Before Labour Members lean back to take comfort at that thought, I should point out that the north-east is also rapidly coming to the conclusion that, because the Labour party thinks that its seats are fiefdoms for ever, it has taken the area for granted.
Before I hear any more protests from the hon. Member for Westhoughton, I should make clear what happened when he was Parliamentary Private Secretary to the right hon. Member for Chesterfield (Mr. Varley). My constituents had to fight up hill and down dale against a Labour Government to save jobs at C. A. Parsons. The plan that the Conservatives are now reactivating about power plant would, if carried through, reduce employment at Parsons in my constituency to 2,000 people and was originated by the right hon. Member for Chesterfield. Therefore, people in the north-east are not too enthused by the policies that the Labour party and Labour Governments have offered them.

Mr. Michael Martin: What was in the hon. Gentleman's election address?

Mr. Thomas: I probably agreed with more of my election address in 1979 than the right hon. Member for Ebbw Vale (Mr. Foot) did and I probably agreed with 90 per cent. more than the right hon. Member for Bristol, South-East (Mr. Benn) did. However, that is their problem, not mine.
The Labour party's irresponsibility is clear for all to see. It stems from something that we saw again yesterday. It stems from the connection between the Labour party and the trade unions, which has now taken the party out of the frying pan of the far Left into the fire of the TUC. We can see the improper relationship that is developing in the deal that has apparently been done with the TUC. In my day, deals with the TUC were thought improper. However, according to today's edition of The Times, Mr. Len Murray is to appear on a platform with Mr. James Mortimer and the Leader of the Opposition to launch the deal. Indeed, the right hon. Member for Ebbw Vale cannot even get the quid pro quo of an incomes policy for all the


sacrifices that he is offering up. Because of the improper relationship in the past between the Labour party and the trade unions, many of the problems in the railways and in the railway workshops have not been faced in time. The men at Shildon may well find that they are having to pay for a change in attitude and an acceptance of the new world of the railways that is coming far too late.
I shall briefly explain exactly what our position is, because I know I shall be accused if I do not do so. We believe that the very minimum that should be done is what was put forward at the railway shopmen's national council meeting on 9 March. We believe that that would provide a breathing space. It is wholly unrealistic to suggest that the whole of the Shildon works could be preserved as it is. No one in the north-east believes that that is a practical proposition. However, the position of Shildon could be preserved and the works could be restarted if we had a Government who would invest, would electrify our main railway lines, would renew the rolling stock that so desperately needs renewal, and who would go for a firm commitment to maintain the rail network more or less as it is now and let the railways develop again.
The position of Shildon could be preserved if that was paralleled not by an incestuous relationship with the trade unions but by a proper relationship with them that spelt out clearly that an efficient, profitable railway that invests cannot be run other than on a proper basis. By "a proper basis", I mean proper manning, not overmanning, doing away with restrictive practices, running stock that has been purchased and allowing investment to pay off. Unless those two factors are twinned, the jobs at Shildon cannot be preserved. The Government have no will to preserve the jobs. They make the blind, simplistic assumption that competitive pressures will sort everything out. There is no will to save those jobs in the north-east. On the other hand, Labour Members make the old assumption that if the unions are given whatever they want and if public money, paid for by others who end up out of work, is thrown at the problem, it will be solved. Neither of those solutions makes any sense.
If there were a general reflation of the economy, proper investment in freight traffic, and a highly productive and internationally competitive industry in maintenance, manufacture and the running of the railway system, the Shildon works might have a chance. However, I resist the charge of opportunism. We believe that if that chance does not pay off and if at the end of a period of grace of two years—after 1984—it became clear that it was impossible to sustain the position at the works or to obtain the necessary work, we should have to face up to the conclusion. However, that must not be done without having thought about it properly.
That is what is wrong now. Things have been done too precipitately. It should be possible to think in terms of what can be done through a trust, other industry, an employee buy-out, or whatever. However, none of those things has been done. It was intended that the works should be closed without doing any of them. A minor solution and proposal was cobbled up in the week beginning 2 or 3 March when the Conservative party saw a by-election coming along. As a result, we are debating the issue today and the situation is in a mess. The problem is not capable of easy solution, but it is capable of a better solution than either the Conservative or the Labour party offers.

Sir David Price: I hope that the House will forgive me if I do not follow the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) down his many lanes. I am very tempted to give him my railway policy, and policy for the north-east. When I had the honour to be Parliamentary Secretary at the Board of Trade between 1962 and 1964 we produced in those three years as many new jobs for the north-east as have ever been produced. Therefore, I shall not take lectures from the hon. Gentleman about how to help the north-east. I have not had that ministerial responsibility for many years, but that is another story.
Like the hon. Member for Bishop Auckland (Mr. Foster) I have personal reasons for seeking to intervene in this debate about the future of our railway workshops. First, I think that the House knows that the British Rail workshops in Eastleigh have traditionally been the largest employer in my constituency. However, some would argue that that accolade should now go to Pirelli General.
Be that as it may, the British Rail workshops are still substantial employers of great significance to my local community. Like the hon. Member for Bishop Auckland, I pay particular tribute to the part that railwaymen and those in railway workshops play in the community. They play a prominent part in charities and local affairs. Even though they do not always support my political views, they are very good colleagues and neighbours.
Eastleigh has seen a major change in the pattern of its railway workshops. It is worth reminding the House about it, because it is relevant to the workshop prospects in other parts of the country. When I first became Member of Parliament for Eastleigh there was not one workshop, but three workshops. We had an admirable locomotive workshop, which made splendid steam locomotives. With the passing of steam, that facility went. When the market disappeared we had to stop making them, because they were no longer required. We had a carriage works, where we made new carriages. That is not done any more. We also had a smallish wagon works.
Today there is only one works, which is devoted entirely to the repair and maintenance of rolling stock, and especially to major overhauls. The reconstruction of coaching stock is of particular importance. It is an ill wind that does not benefit somebody. I think that we have marginally gained from the lack of investment by the southern region in new coaching stock. As a result, carriages are being given a new lease of life in our workshops, whereas in the past they would almost certainly have been scrapped. Indeed, in an ideal world they probably should be.
Eastleigh has, therefore, been through all the stress and anxiety of a fundamental change of function within the railway system, and without any major industrial conflict. I wish that the critics of the British Railways Board would give it and the rail unions more credit for the amount of change and the overall job losses that the railway community has absorbed with remarkably little "aggro" since the end of the second world war.
My second reason for intervening in the debate is that I am a member of the Select Committee on Transport. Since the Serpell report was debated in the Chamber we have taken public evidence from the principal characters involved. We have not yet made our report to the House on those hearings and it would be most improper of me to


anticipate it. Therefore, I must exercise a degree of self-denial in what I say today. However, it is entirely proper that I should draw to the attention of the House evidence given in public that bears upon the subject of today's debate.
The first factor about which I should like to remind the House is the scale of BREL's activities. This was given to us clearly by Mr. James Urquhart and supplements chapter 7 of the principal Serpell report. Of BREL's turnover of £600 million, about 60 per cent. goes to the maintenance of the existing British Rail fleet; 15 per cent. goes to the manufacture of new equipment needed to maintain that fleet; 20 per cent. goes to the construction of new rolling stock; and a little simple arithmetic shows that 5 per cent. goes on miscellaneous activities, which include some outside work.
As I have always understood it—it is certainly the case in Eastleigh—the management has always been free to take outside work where it can be fitted in to its main works programme for its principal customer, British Rail. It has been open to the works management to find outside work where it can. The management always tries to do so, but I can speak only for Eastleigh.
It is clear that 75 per cent. of BREL's activity relates directly to the current operating needs of British Rail. It therefore follows that the future scale and deployment of BREL's activities must be closely related to the future of the railway system as a whole. It cannot be viewed in isolation. Indeed—I put it this way—it must follow decisions that are made about the future of the railway system.
I am glad to be able to report to the House that the chairman of British Rail has, in the past, taken the same view as me. He told me in July 1981 that
the works at Eastleigh is in a better situation than most as its main workload involves the repair of passenger train locomotives and rolling stock for use on our Southern Region.
This raises the question whether there should be a separation of responsibility for maintenance work from new construction. I put to a number of witnesses the clear question whether it would not be a better management model if the maintenance responsibility came directly under British Rail and was not hived off, as it is, to BREL.

Mr. Ron Lewis: rose—

Sir David Price: I shall give way to the hon. Gentleman in a moment. Mr. Urquhart, who is, as the House knows, the main board director of British Rail and has overall responsibility for the workshop activities, gave an interesting reply. He said:
We have thought in the past, and considered the pros and cons, of totally separating the maintenance workload from the building and we have concluded there are tremendous benefits in the present mix, in that there is a stable workload for maintenance, which provided the ability to sustain the factory capability, which in turn can absorb the peaks and troughs of new building and work as it comes along.
I shall not continue the quotation but Mr. Urquhart develops in the point further. To me that is a strong case in favour of present arrangements, but would those arguments remain valid if there were a different relationship between BREL and British Rail?

Mr. Ron Lewis: The hon. Member has certainly made a good case, with much of which I agree. The hon. Gentleman said that he had an assurance from the present

chairman of British Rail that Ashford would more or less remain as it is. In the event of the present chairman being demoted, which appears to be on the cards, will that assurance hold under a new chairman or will the cut take place in Ashford?

Sir David Price: It is not Ashford, but Eastleigh.

Mr. Lewis: I meant Eastleigh.

Sir David Price: Ashford is in a rather different position. The letter from which I quoted was written in July 1981. The hon. Member for Carlisle (Mr. Lewis) will not be surprised to learn that I have recently written to Sir Peter Parker to ask him whether he could renew that assurance in the post-Serpell context. I have not yet had a reply.

Mr. Lewis: Will the new chairman do so?

Sir David Price: I assume continuity of collective responsibility.
I was about to develop the point that the separation of maintenance responsibility from manufacture could be made a valid managerial case if some of the proposals in the Serpell report were to be carried out. What seems to be agreed by one and all is that there should be an arm's length relationship between BREL and BR. It is the current working of that arm's length relationship that has been questioned by Sir David Serpell and by Mr. Goldstein. However, the relationship in its present form is strongly defended by Mr. Urquhart, who said:
I think the relationship between BREL and the railway on operational day-to-day issues and the running of the railway is excellent. The problem of the relationship is one of contractual agreement during the period when there is demonstrably developing a surplus of capacity in BREL and the problem really is to identify what that surplus is and how the surplus may be removed and how the railway can avoid having to pay for the surplus.
There, in a nutshell, is the issue facing the House.
It is interesting, too, that Mr. Goldstein, who was a critic of the way the arm's length relationship was working, nevertheless found himself compelled to commend the standard of management in BREL. I shall quote some of the phrases Mr. Goldstein used. He said:
I hope it comes through the report, with some very bright management people in BREL, very keen, that whilst they were very loyal, inevitably there was a degree of limitation, restraint, imposed on them. They really want to get up and go and do well. They are not masters in their own house and when we looked at this it did seem to us that whilst the principle of arm's length has been the intent, de facto it would not work and therefore we felt that it ought to be instituted.
I take that as quite encouraging. An independent consultant, much criticised in the House for being too tough, comes away praising the management of BREL. That should be worked on and I hope that British Rail will work on it.
It is simply not possible to make decisions about BREL in isolation. It comes back to the clear message coming out of our debates, coming from all the reports and, from listening to witnesses on the Select Committee—that the future of the railwork workshop depends almost entirely on the decisions that have yet to be taken on the future and shape of our railway system. Therefore, the future of BREL cannot be determined in isolation. But, determine the former and the latter will almost certainly determine itself.
In my judgment, the railways will always need their own workshops. Therefore, the sooner the major policy


decisions about the future of the railway system are taken by my right hon. Friend the Secretary of State, the better it will be for everyone. I am sure that he will recognise that the uncertainties leading to continuing anxiety in the railway community, which have been stimulated by Serpell, are bad for everyone. The sooner they can be ended, the better for us all.

Mr. Deputy Speaker (Mr. Paul Dean): Before I call the next hon. Member, I must inform the House that the winding-up speeches are expected to begin at about 6.20 pm. Many hon. Members with strong constituency interests still wish to take part in the debate. It will help greatly if speeches are brief.

Mr. Arthur Lewis: I hope that the hon. Member for Eastleigh (Sir D. Price) will not be offended if I say that I thought he made an excellent speech, or if I were to suggest to the Government that he would make a better chairman than Sir Peter Parker. I am not enraptured by Sir Peter Parker or by the Government allowing him to work part-time for about £75,000 a year.
It is amazing how the Government can find millions of pounds to bring men from Canada and America, give them jobs and then put them on to part-time. The Government always sack the lower-paid workers and make them redundant. The trouble with British Rail is that there are far too many highly paid administrators. Cut a few of them out. Cut out some of their first-class travel, and we might make some progress.
It annoys me that the Government are deliberately causing unemployment and preventing an advance towards full employment. A couple of weeks ago the Lords debated the Transport Bill in the other place. They objected to a nominal subsidy for the man who goes out to work to earn money, although the Lords are being paid. Some of them get £300 per day. That is paid for by the workers while the Lords object to the workers receiving a subsidy to travel to work by train. They receive a 100 per cent. subsidy for first-class travel. They do not object to that. They come from their homes in Scotland right down here. They say, "Hello" and off they go—firstclass—while the poor old railway worker must be kicked.
I resent the Lords. They all have two or three jobs. They are allowed to hold chairmanships of public boards, private boards; have a fiddle here and a fiddle there and help themselves here and help themselves there—legally, of course. They have tax-free pensions. The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) is here from the Social Democratic party. Thank God that Lord Shawcross has gone over to them. We have lost him.
We could solve all British Rail's problems by encouraging the railways. Cheaper fares would encourage people on to the railways and off the roads. We would save on the import of tyres and the rubber that goes into them, and be able to increase production. Instead, everything that is done is done to run down the industry.
Temple Mills is in the area that I represent. The hon. Member for Eastleigh rightly paid a tribute to railway workers. This country, the Minister, and the House would not be here if it had not been for the excellent endeavours of railway workers during the last war. I know" I was there. Temple Mills was bombed night and day. People lost their homes, not once, but three or four times. They still worked to repair the trains and get the locos out to move the munitions and everything else.
The industry was promised many things and then along came Dr. Beeching and all the other cuts. There were cuts at Temple Mills and the great heroes who had helped the country to survive were kicked out. Lord Beeching is all right; he goes up to the other place and receives hundreds of pounds a day.
The Government are responsible for causing muggings, lawlessness and vandalism. In my younger day, when kids left school they used to fight for apprenticeships at Temple Mills. There is no fear of them doing that now. There are no jobs. They do not want to go to school; they want a job. Instead of standing around they start smashing and vandalising things. As a result, the Government pour money into the police. They double police pay to ensure that there are enough police to deal with these chaps who should have jobs in the railway workshops.
The Minister mentioned exports. It is a pity that the right hon. Member for Sidcup (Mr. Heath) is not here. He is very interested in the Third world, as we all are. Today we have with us his excellency President Kaunda of Zambia. We welcome him. It is rumoured that he will ask for more of the British taxpayer's money to help his country. God bless him, I hope that he succeeds.
I have only once, during 38 years, had the pleasure of going to a Commonwealth Parliamentary Association conference. A couple of years ago I went to Zambia. I was delighted to be able to travel from Stanleyville to Lusaka. It was an eight and a half hour train journey. The train was dead on time leaving and arriving. It was the most beautiful train that I have ever seen. I asked where it was made and was told that it was made by Hitachi in Japan.
The United Kingdom supplies Zambia with money, and it buys trains from Japan. Why do we supply it with money? We want to help it, but why cannot we say "If you want trains, we will supply them. We will build them here." Instead of giving them British taxpayers' money and putting our people out of work, we should supply all these developing countries. They do not need to go to Japan. It would help not just those employed in the railway industry. The trains would have to be shipped. We heard yesterday about the shortage of work in the shipping industry. There is a shortage of orders for ships. We should need the ships and the seamen to transport the goods.
It is about time that we stopped giving money to developing countries for them to spend where they will. Let us say to them "If you want trains and railway lines, we have the best workshops and the workmen. Do not go to Hitachi and other countries. Come to Great Britain." The Government should insist on that. It would not cost more money. It would not lead to inflation. Instead of giving hundreds of millions of pounds to Zambia, Zimbabwe or anywhere else, we should tell them to let us know what they want and we should provide the goods. They cannot manufacture everything themselves. We should supply them with goods to develop their agriculture. They buy marvellous agricultural implements and machines, but not from Great Britain. They use British money to buy those goods from Germany and France.
The leader of the SDP, the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), spoke earlier and walked out. He has declared that he receives a pension of half his salary. He spoke about his party not having an incomes policy. How would an incomes policy affect him? He receives a tax-free pension of half his pay. Does that come from the British taxpayer? We all talk about what


should and should not be done. It is simple; all we have to do is take our fingers out of other people's pockets and say that we will look after the workers.
When the chips are down, everything that we have in this country is paid for by the ordinary blind, disabled, sick and unemployed people on the street—the consumer. It all comes out of taxation. All those people now pay taxation. In my young day they did not. They did not have enough money, so did not pay taxation. Now we have VAT, thanks to the SDP. We have indirect taxation. Now everyone pays taxes. Ultimately, the ordinary taxpayer pays. If we asked the ordinary taxpayer who is paying X pounds per week whether he wanted the money to go towards good railways with a good freight and passenger service or whether he would rather pay the unemployed unemployment pay, I am sure that he would say that he would rather we developed the industry than carry on in a stupid way, as the Government are doing.

Mr. Geoffrey Dickens: I am delighted that the debate is taking place today, because it is right that the official Opposition should do their job of opposing, and, as the Government, we should be here to explain. I am disappointed that there is not one Liberal Member in the Chamber. It is only a suspicion on my part, that many of them are knocking on doors in Darlington and making promises when they should be fighting with the Opposition for the people in that area. They are paid to be in this place, but they are not here.
On many occasions when my hon. Friend the Prime Minister has been pressed at the Dispatch Box about the economy, she has said that the only way for our industry to survive is for it to produce products that people wish to buy, deliver them on time, make them the right quality, give a good after-sales service and make them at the right price—in other words, a competitive price. I am sure that everyone in the Chamber will agree that the British Rail Engineering workshops have done an excellent job. We could not criticise them on the last four items that I have mentioned. They fall down on only one item. It is no fault of their own. This is a changing world. British Rail is not producing in its workshops the products that people wish to buy because of the changing world.
I am sure that hon. Members on both sides of the House offer sympathy to the families of the work force. I know that sympathy does not help, but at least all of us care about unemployment and we are deeply conscious that to close the workshops means misery and sacrifice for families in many parts of the country.
My right hon. Friend the Prime Minister has said on many occasions that the Conservative party has a fresh and resolute approach. We are not going for cheap popularity for the benefit of by-elections. It would be easy for a weak-kneed Government to buy a few votes by making a promise from the Dispatch Box to keep the workshops in Shildon open. That would be popular and might even win us the by-election. However, that is also a great responsibility for a party in government, because, if we subsidise and keep unviable units open, someone else has to pay for them. We are the custodians of other people's money. We control the taxpayers' money. We have to use it sensibly. That is the only way to manage a country.
The Labour party need not show great glee, because I recall the British Steel Corporation closures in places such as Ebbw Vale, East Moors, Shelton, Glencarnock and Bilston. I also remember the days of Lord Robens, under the Labour Government, when tens of thousands of miners were thrown out of work as pit after pit was closed, causing misery to many of the communities that had no other form of work. The Labour Government did not introduce the sort of measures that we have introduced in an attempt to save and produce new jobs, and they did not emphasise the importance of small industries and private enterprise. Those people were left absolutely stranded.
Unfortunately, three closures of railway workshops have been announced—Shildon, where 2,000 jobs will be lost, Horwich, where 1,100 jobs will be lost, and Temple Mills, where 300 jobs will be lost. No votes are gained after people's jobs have been lost. If there was an easy, quick solution, do not Opposition Members think that we would have applied it? Most of us have been affected by unemployment.
Let us consider the argument. Shildon is a single—purpose factory. It could produce 1,500 new wagons a year. That is what the factory is designed to produce with its equipment, gantries, cutting and preparation machines, bending machines, and so on. It could even repair 15,000 wagons a year. However, we know that for the next three years at the very best it will have orders for only 150 new vehicles per year and, optimistically, only 9,000 wagons will come into the workers' hands for repair.
The Shildon work force is superb. There is no doubt about that. It is good and not out of date, but the workers are heavy fabricators, with platers, welders, riveters and fitters. There are few electricians and no vehicle-building craftsmen. It cannot go into other areas, because it is not geared to do so.
We have heard talk of the new type of wagon—the modern freight wagon for the Speedlink services. If British Rail is to be competitive and attract business, it must do it in the cheapest and most effective way. Otherwise, it means shovelling taxpayers' money into the nationalised industries yet again, the result being false jobs and no future.
Nearly £1 billion was given as a grant by the Government last year and £1,600 million has been invested in British Rail since 1979. I remind the Opposition that only £1,100 million was invested by the Labour Government in the previous four years. British Rail has tried to save those yards. It has been said that it did not care and that we did not care. We care and British Rail cares.
British Rail consulted British Steel about its movement of steel and the wagons on which the steel was carried. There was serious consultation with British Steel. British Rail got in consultants to study job creation in those works. It has done everything possible to try to save those jobs.
British Rail will try to suppport the local enterprise trust. The House will be pleased to know that at the moment negotiations for an enterprise agency in Shildon are going on. I want to talk about help. When the Labour Government carried out their cuts, there was not much help. People say that we do not care, that we throw people out of work and that no provision is made for them, that we have done nothing and that now, when there is a by-election, we are saying that we shall do something. I shall remind the House of some of the things that were done before there was any talk of a by-election.
Help for small businesses is being given in the Shildon and Darlington area. There was some provision for employment in my right hon. and learned Friend's Budget. Since 1966, about 55 manufacturing firms have located projects in the area. Sadly, 18 of those have since closed. The remaining firms, which employ 3,800 people, include Carreras Rothman, which opened in 1971, and Darchem, which opened in 1974. There have been more recent positive developments. Cleveland Bridge and Engineering Company Ltd, which opened a new £26 million factory in Darlington in January 1982, has recently won a £20 million contract to supply steel sections for a new power station in Berlin. Tallent Engineering, Darlington, has increased its work force by 80 as a result of a contract to supply suspension arms for the Ford Sierra. Fine Fare is to build a 56,000 sq. ft. superstore in Bishop Auckland, which will employ 180 people by mid-1983. GEC Telecommunications, Aycliffe, is recruiting 165 workers in 1983 as a result of its job-sharing scheme. Construction of a new £1·75 million office and shops development in Aycliffe town centre has begun and 100 new jobs are expected there.

Mr. Arthur Lewis: I know that the hon. Gentleman is reading the Conservative Central Office handout. Would it not be better and easier for him to ask permission to include it in the Official Report to save his and our time? He could then circulate it. We have all seen it.

Mr. Dickens: As usual, I am grateful to the hon. Gentleman for his help. Perhaps I had better stop there.
I should point out that if a fraction of the investment that has been poured into British Rail were poured into the textile industries of Yorkshire and Lancashire, we would not be facing our present problems. As I said at the beginning of my speech, when we subsidise concerns which do not have the full order books to support them, someone else must pay. Only a responsible Government have the guts to do what must be done, even if it does not win votes.

Mr. Michael Martin: I am conscious of the fact that many other hon. Members wish to speak, so I shall be brief. I was disappointed by what the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said. He referred to the Darlington by-election and said that hon. Members were here to debate the subject only because of that by-election. It is a pity that he was not here when we debated the Serpell report, because the speeches made by hon. Members on both sides of the House then were excellent. The Chamber was packed even on the day before, when the Secretary of State made his statement. Those occasions showed that both sides of the House are interested in the railway industry and in British Rail Engineering workshops. The speech of the hon. Member for Newcastle upon Tyne, East showed that he knows very little about British Rail and British Rail Engineering Ltd.
There is only one employer worth talking about in the community that I represent—the British Rail Engineering Ltd. and Springburn workshops. They are the only engineering workshops in Scotland, and if anything happens to them we shall give more ammunition to the nationalists in Scotland. I am proud to be Scottish. I am proud of my culture and my heritage, but I fear nationalism

because it brings out the worst in people. The Government have as much of a responsibility in that respect as the Labour party to ensure that the nationalists do not derive more ammunition than they already have.
It is all very well for hon. Members to say that there will be a Safeway supermarket in Bishop Auckland, but nothing can replace the type of work that is being done in railway workshops. It is important that people do work in which they can take a pride because it involves skills that have been built up, not merely over a few years or months but over generations.
The hon. Member for Eastleigh (Sir D. Price) made an excellent speech and referred to the steam locomotive workshops. When those locomotives were being built, there were four workshops making them in Springburn. A worker would have been considered eccentric if he had even attempted to travel out of Springburn to another part of Glasgow for work because there was plenty of work in Springburn during the 1950s and the early 1960s.
I should like my children and those of my constituents to have a place of work where they can go and learn a skill of which they can be proud. The west of Scotland is famous for its engineering workmanship. Springburn is one of the few areas that can obtain apprentices to be trained for the future. The Government keep talking about the recession bottoming out and things getting better if we make sacrifices. Even if we accept that argument, when we come out of the recession the first thing that we shall need is skilled men. We must have employers to train skilled men and women. We shall be able to do that only if the Government face up to their responsibilities and ensure that there is proper investment in the industries that we are debating today.
Many of my constituents and, no doubt, those of other hon. Members are anxious about vandalism. Some people talk of giving the police more powers to curb vandalism, but what do they expect if young people leave school at 16 and, by the age of 20, have still never had a job worth talking about? How can we ask our young people to respect the community and the environment unless we can give them some hope for the future? I hope that Ministers will note that and give us hope of a future for the communities that we represent.

Mr. Kenneth Warren: I declare an interest in that I was associated with the British Rail computer-controlled freight utilisation system some 10 years ago. Through that association, I gained an appreciation of the tremendous skills and devotion of BR employees of the type that has been mentioned by hon. Members on both sides of the House today. I accept that the skills that those men have are a result of the apprenticeships to which the hon. Member for Glasgow, Springburn (Mr. Martin) referred. Those skills are the result of a lifetime of work which, when collected together, represent a unique national asset.
It is gratifying to hear hon. Members say that those men and their workshops are among the best in the world. My hon. Friend the Member for Eastleigh (Sir D. Price), who voiced the attitude of BR management, said that they are probably the best in Europe. At that moment, however, my understanding of what is going on parted company with what has been said so far.
One person is missing from the Chamber—the chairman of British Rail. It is he who should reply to the


debate as the questions that we are asking cannot be answered by the Government alone, whatever party is in power. British Rail management has an answer which it should have been giving to the workers at Shildon and other places for years. It should have explained what is being done with the substantial investment that taxpayers have made in British Rail. Shildon is a fine workshop, but it is difficult to understand why British Rail management has allowed it to grow to a size that is 10 times greater than the demand for its services justifies. Something must be wrong if that has been allowed to continue for a long time.
What does British Rail management propose to do about exports? The hon. Member for Bishop Auckland (Mr. Foster), who spoke with great feeling and knowledge about Shildon, said that many countries subsidise the output of their railways to make it more competitive abroad and the hon. Member for Newham, North-West (Mr. Lewis) also mentioned that point. But we are contributing nearly £1,000 million a year to British Rail, which is a direct subsidy that should help exports from places such as Shildon. What has happened over the years to allow that workshop to come so near to the precipice of destruction?

Sir David Price: In his evidence to us, Mr. Urquhart made it clear that, because of infant industrialisation in many of the major Third world countries, there was a market not for wagons, but for sophisticated locomotives and carriages. British Rail Engineering Ltd. has successfully sold coaching stock, restaurant cars and the like, but not wagons, to the Third world.

Mr. Warren: My hon. Friend, with his considerable knowledge, takes me straight to the point that I was about to make. Why has that workshop ended up without the relevant skills that would have enabled its workers to diversify into the available markets. There is a demand. China is one of the world's great expanding railway nations. If the workshop could not provide rail wagons, why could it not turn its skills to the gigantic growth of the container industry in air, sea and rail freight? That is a management problem, and I am grieved that those skilled workers were not led during the time available, and with all the investment in British Rail, to a point where they could use those skills.
Perhaps my hon. Friend the Minister will tell the House whether British Rail workers are allowed to bid for private enterprise contracts, to which the right hon. Member for Barrow-in—Furness (Mr. Booth) referred? If they are, what is their success rate and are they being encouraged to bid even now?
From what I learnt from the computer control study that is now being implemented by British Rail, I do not understand how the industry can get into such a tangle. When we considered its use of freight wagons, we found that not only did they move on average only a few miles a day but that many thousands were missing at any one time. That was a management problem, but even when the wagons were found there was no demand for them. That study, which was completed and introduced 10 years ago, should have been reflected rapidly into the output demand at Shildon, which would then have had time to diversify into other markets.
Although the members of British Rail's management cannot answer my points in the House today, I must ask

what they have been up to. My right hon. Friend the Secretary of State will know how keen we are in Hastings to have an early reply to our request for electrification of the line there. There is a demand for new passenger stock and new wagon stock, but it is difficult to realise that demand. The hon. Member for Keighley (Mr. Cryer), who is unfortunately not here now, said that some trains must travel 1,000 miles a day, which is wearing them out. But there must be something wrong with British Rail's engineering standards if the trains cannot run for 1,000 miles a day. Aeroplanes, which are much more complicated, are expected to cover 6,000 or 7,000 miles a day and produce seat-miles costs lower than those of British Rail.
What is the standard of design leadership in British Rail? Why should it have problems with the advanced passenger train? The tilt design problems are merely stability problems, the mathematical solutions to which are well known in the aerospace industry. What about the failure of the wheels and axles on that train? What quality assurance is there for the metals used? Why are trains still delayed by leaves on the line or by frozen points? How can we allow the taxpayer, who is subsidising British Rail heavily, to travel as a commuter in cattle truck conditions that are a disgrace and a hazard to public safety?
British Rail management has much to answer for in bringing to the edge of the precipice places such as Shildon. The problems there epitomise the need for tighter and more effective management of British Rail if it is to justify the substantial subsidy provided by the taxpayer each year. I hope that both sides of the House will agree that it would be totally wrong for the workers at Shildon to be fought over as pawns in a political debate on the eve of an election, because many more fundamental questions must be answered.

Mr. David Young: The matters that I shall raise have no bearing on the Darlington by-election. The Horwich workshops are not in my constituency, but they employ many of my constituents. The economy of the entire area will be affected decisively by the closure of those workshops. If the standard of the Government had been up to the standard of the workers at Horwich in their willingness to adapt and to meet the criteria laid down, we might not have 4 million unemployed in Britain today.
I wish not to bandy arguments across the Chamber but to make specific points. One reason why Horwich is in trouble now is that the Government have decided to cut the rail network, on which places such as Horwich depend. The closure of such workshops is the thin end of the wedge to implement the Serpell report. Not only workshops but entire communities are involved, and such facts are skimmed over when we talk in narrow departmental terms. The decision to close Horwich goes far beyond the geographical boundaries of one area.
I represent what was once a textile constituency but where engineering has replaced textiles as the occupation of many people, and there have been twice as many redundancies in engineering in the past three years as there have been in textiles. In January 1983 in the Greater Manchester council area, 43 people were chasing one job. In February 1983 in Bolton, 47 people were chasing one job. In the Greater Manchester council area, 163,628 people were employed in engineering in 1978 compared with 120,861 in 1982. In the same area, the number of


apprentice craftsmen in engineering has been reduced from 1,446 in 1978 to 503 in 1982—a decline of 65·2 per cent.
The key factor is that the Horwich workshops are one of the main training grounds still left open in the area for engineering apprentices. It is not only the closing of the workshops but the discarding of the engineering skill and expertise on which the future of Britain is supposed to depend. Ministers talk about closures being the way to new full employment, but I think that it is like saying to people that if they suffer from pernicious anaemia they should go to be treated by a vampire. Slowly, but surely, industries are being bled to death, and not one job is forthcoming.
The social cost is enormous. If Horwich closes, 1,138 jobs will be lost. In sub-contracting and supplies, another 50 jobs will go. If the spending potential of the community is between £2·5 million and £3 million and 40 per cent. of that goes into the local economy, there will be a loss of between £960,000 and £1,200,000 a year to the local economy, which is equal to 21 jobs. These figures come not from any party central office but from the joint unit for research on the urban environment of Aston university.
If the total job loss is 1,209, and the unit calculates in its survey that the cost to the state of each lost job is £1,470 per annum in loss of tax and insurance, and in social benefits £1,428 per annum, the total cost to the state will be about £3,503,682. That is without including the £400,000 in lost rates to Bolton and taking no account of lost rates to the North-West water board.
In 1979–80, some 70 apprentices were taken on at Horwich by BREL. No apprentices started in 1982–83 because of the threatened closure. If those works are closed, 214 apprentices will be looking for jobs. Where will they go? There is no place in Bolton or the surrounding area that can take up that slack. The prospects in Bolton, Bury and Wigan are limited. In 1980 the federated engineering companies in those towns employed 16,344 people. In 1982 they employed 13,273. We are talking not about accountancy figures but about individual tragedies of people who are sacked, whose skills are lost, and who have nowhere to go. We are looking at the death of a community, and the responsibility lies at the door of the Government. By proposing to throw these skills on the scrapheap, the Government are jeopardising the future not only of those who are made redundant today but of generations to come, and with it the future of engineering in the area.
The Government must look at the full implications of their policy. These workshops are being closed not because they are inefficient but because there is a lack of political will on the Conservative Benches to see that they are kept open.

Mr. David Stoddart: The hon. Member for Hastings (Mr. Warren) asked why Shildon found itself in its present position and tried to answer the question by blaming British Rail. That is not the true answer because British Rail had to work under the writ provided for it by the Government.
Shildon finds itself in its present position for reasons that began in 1953 with the Transport Act 1953, which broke up the British Transport Commission and did away with co-ordinated transport undertakings. That was followed by the Beeching cuts, and by that time we had allowed subsidised lorries on our roads, which undermined

the position of British Rail. Those are some of the reasons why Shildon and other workshops find themselves in their present position. It is the attitude of Governments, particularly Tory Governments, that has caused the crisis that faces British Rail.
The position of railway workshops in Swindon, although not the same as those in Shildon, Horwich and Temple Mills, is very similar. It is true that the Swindon workshops were not marked for closure in the most recent announcement, but their future is uncertain. From what we can hear, the workshops in Swindon have no future beyond 1986. In other words, Swindon could be the next workshop to close.
There has recently been an outcry in Swindon over the secret plans drawn up in 1982 for the works to be closed. BREL says that these have now been dropped, but, as far as I and the workers at Swindon are concerned, there is no long-term future for the railway works there. We have had great headlines such as "Fear over BR's secret plans" and we can get no assurances that the workshops will remain open beyond 1986.
Today it is Shildon, Horwich and Temple Mills—tomorrow it will be Swindon. The workers at Swindon and elsewhere are entitled to be aggrieved at what they see as treachery by the Government and British Rail over a long period. The work force in Swindon and other places has co-operated to the full in increasing efficiency and the effectiveness of the railway workshop. Indeed, the railwaymen have led the way in introducing new practices, eliminating demarcation disputes and using labour, space and materials more effectively and profitably. At Swindon the works were made profitable in spite of having to carry large overheads for a long time. Furthermore, management and work force have come in for high praise from British Rail Engineering Ltd.
Given the right conditions, there could be ample work to keep open the workshops for a long time, if not permanently. In our view, it is not only the workshops where closures have been announced or those like Swindon which are under theat of closure which are endangered in the long term; there are others.

Mr. Harold Walker: Doncaster.

Mr. Stoddart: There is Doncaster, as my right hon. Friend mentions, and Derby. They are all in the firing line. That is why there must be a concerted effort on the part of all the people in the railway workshops to resist the proposed closures.
I am concerned about Government policy in many respects. I am also concerned whether they plan to privatise completely BREL, although this would be operationally mad because British Rail could not allow its day-to-day running requirements to be subject to the whims of an outside private organisation. My guess is that the Government will not privatise directly but will do it by stealth.
There are other ways in which the Government could help their backers in private industry to the detriment of BREL and of the rail customer as well. Many nasty rumours are flying around that it is Government policy to hand over at least 50 per cent. of new build work to private firms, irrespective of cost, performance and quality. That would be completely unacceptable. If the Government insisted on a big proportion of new build work being handed over to private firms in the face of a lower tender


from BREL, it would be a scandal of immense proportions and would fly in the face of what the Government declare to be their policy of free competition. I have tried through parliamentary questions to obtain an assurance on this point but have so far met with stonewalling answers. Perhaps in his reply the Minister would be good enough to state his policy on this.
On the future of the railways, the British Railways Board is often unfairly blamed for having no proper plan and no direction. The board works under an intolerable handicap since the Government and the country seem incapable of deciding exactly what sort of railway system we should have and how it should relate to total transportation policy and to the overall economy. That is not good enough. The railways cannot operate under those conditions.
It is vital to plan for an expanded, up-to-date railway system, geared to the needs of passenger and freight traffic. Hardly anyone would deny that it would make for an improved environment and better use of land and resources and would conserve energy if more freight were carried by rail. It cannot be achieved unless the railway network enables goods to be transported from factory to customer on the rails. Due to the relocation of industry and the closure of branch lines, this is impossible. Instead of closures, new lines should be opened. I hope that the Minister will recognise that.
Some people believe that road transport can meet most, if not all, of our transport needs for passengers and freight, but they are completely wrong and shortsighted in that belief. In the first place, many people do not own or have access to a car and they must be considered. Secondly, if car ownership in this county moves up to the level of ownership in Germany, France and Italy, and the Society of Motor Manufacturers and Traders achieves its objective of 2 million car sales per year in the United Kingdom, we shall soon literally run out of adequate road space to accommodate cars.
To build more roads, often duplicating existing trunk routes, would be wasteful and damaging to the environment. On the other hand, building railways would be cheaper and much more economic in land use, and would provide the safest of all means of travel as well as causing the least damage to the environment. So let us extend our railways and side by side with that modernise existing track and signalling systems and replace clapped-out rolling stock which travellers have to use.
A programme of expansion would not only save the workshops which it is proposed to close and those threatened with closure but would provide much work for many private firms. I am sorry that the hon. Member for Chippenham (Mr. Needham) is not here, because it would provide additional work for Westinghouse Brake and Signal Co. Ltd. of Chippenham, which has already lost jobs and is likely to lose more.
If we do all these things, we can save the railway workshops, provide the country with a first-class railway system, which it needs and deserves, help private industry and reduce unemployment.

Mr. Stanley Cohen: I point out to the hon. Member for Huddersfield, West (Mr. Dickens), who referred to the textile industry, that I am as concerned

about it as he is. I hope that he will be as concerned as I am about the subject we are discussing. If we consider the effect on employment, the social situation, exports and the economy, that will be enough to go on with. I shall be very brief because I know we are pushed for time. I am sorry that the spokesman for the Social Democratic party, the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), is not here.

Mr. Ron Lewis: There is not one of them present.

Mr. Cohen: I am sorry that they are not here. We are not discussing this subject to try to achieve political advantage in Darlington. I am concerned about the industry.
I must declare my interest as the national treasurer of the Transport Salaried Staffs Association. I am concerned about the people I represent, about the industry itself and about its ability to serve the people. I repeat that I am sorry that the hon. Member for Newcastle upon Tyne, East is not present to hear what I have to say.
At Shildon there are 232 clerical staff employed in the workshops. They will be phased out and by 1984 there will be no clerical employment. Horwich has 234; 207 will be phased out, which will leave 27 at the end of 1984. Temple Mills will disappear, with 66 clerical staff and 230 shop men. Jobs will be reduced from 762 to 27, a reduction of 735.
I disagree with the figure of £5,000 a year, given by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), to keep someone unemployed. I reckon that the amount is nearer £8,000. If we take into account that the person is no longer paying a national insurance contribution or tax it is £7,000 to £8,000. Therefore, the nation is losing approximately £6 million a year. In other words, we will be paying people to be unemployed. It is distressing that we fail to give enough support to an industry which is very efficient. We confine the support to production within limited areas. In fact, the industry does not need to produce wagons just for the railways. Production could be greatly extended, but it has not been given the opportunity to extend it. It is appalling to close industries and create unemployment in the present economic and social circumstances.
I shall finish at that point, because I know that the Front Bench spokesmen wish to speak.

Mr. Roger Stott: I was about to say that I was surprised—but perhaps I am not surprised—to see acres of empty Benches facing me.

Mr. Dickens: I am filling them.

Mr. Stott: Certainly the hon. Member for Huddersfield, West (Mr. Dickens) fills more than one place. It shows the way that Conservative Members feel about this important subject.

Mr. Cryer: And the SDP Benches.

Mr. Stott: My hon. Friend the Member for Keighley (Mr. Cryer) draws my attention to the fact that the alliance Benches, too, are completely bare.

Mr. Arthur Lewis: rose—

Mr. Stott: No, I shall not give way. I have only just started.
The subject of this debate is a further example of the industrial tragedy and human misery that have beset our


nation for the past four years. The rigid application of an economic policy which has been pursued and propagated with an almost religious fanaticism by the zealots in Downing Street and the Treasury has devastated Britain's productive industry, it has produced the highest unemployment figures in Europe, it has blighted the future of a whole generation of young people, and it has single-handedly destroyed local communities throughout the land. Towns such as Corby, Shotton, Consett, Kirkby and Linwood have been closed down and their people have been sacrificed on the altar of monetarism.
This debate is about two more communities which have the sword of Damocles hanging over their heads—two towns which are inextricably linked by history and tradition with the railway community, and which are geographically situated in regions where unemployment is as high as it was in the 1930s. If these workshops close, the people of Shildon, the people of Horwich and the people of Temple Mills will be consigned to the scrapheap of unemployment with all the attendant misery that millions of our fellow citizens are having to endure.

Mr. Harold Walker: When my hon. Friend says that this debate is about Horwich, Shildon and Temple Mills, he should not overlook the fact that there are other towns which are heavily dependent on railway workshops and which are suffering badly from the consequences of reductions in areas where there is intolerably high unemployment.

Mr. Stott: My right hon. Friend makes a fair point. His workshop has been hit by redundancies. Work has been lost there, and if this Government remain in power it is likely to lose a lot more. However, this debate is about the closures that have been declared by British Rail.
I was talking about the demise that is facing this country. It need not happen, and it should not happen, because there is an alternative. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) and my hon. Friend the Member for Aberdeen, North (Mr. Hughes) and I have argued over the past three years that what British Rail needs is not inquiries by a Serpell-type committee that produces a fatuous series of stupid options; what British Rail and the nation need is more investment in our railway network to make it efficient, for both passengers and freight.
However, this Government, throughout their period of office, have made a systematic attack on the whole of public transport, and no more so than on British Rail. Every major investment programme that has been submitted—particularly the investment programme for electrification, and almost every other programme—has been butchered by the neanderthal crackpots who inhabit the Prime Minister's policy unit. The only contribution to the railway debate that has emanated from that Adam Smith appreciation society has been the pulling up of railway tracks, laying down tarmac, and turning them into roads. What an utterly stupid and irrelevant proposal. If one were to walk through the deepest recesses of their minds, I doubt whether one would get one's feet wet.
In spite of what the Government say about the investment ceiling for British Rail, they have forced the board to reduce investment expenditure by setting an external finance limit that embraces grant and external borrowing. The effect has been a reduction in investment. The hon. Member for Newcastle upon Tyne, East (Mr.

Thomas) drew the attention of the Secretary of State to page 41 of the Serpell report, which clearly shows that there has been a fall in investment since 1979.
If we contrast what is happening in the United Kingdom with what other Governments are doing for their railway finances, it becomes abundantly clear that British Rail will continue to be characterised by low investment, low Government support and high fares. Almost every country in Europe is spending more money on modernising its railway network. For instance, Germany and France spend much more than we do, and their railway industries make a bigger loss than ours. Indeed, throughout the world railways are enjoying a renaissance. It is only here in Britain, the birthplace of railways, that we are witnessing what Sir Peter Parker calls the crumbling edge of quality. The Government seem to be totally indifferent to what is happening and are purposely contributing to the demise of the railways.
If the Secretary of State does not believe my right hon. Friend, and if he does not believe me, perhaps he will believe the British Railways Board about the need for investment. It produced a document on rail policy in 1981 entitled
A statement by the British Railways Board of its policies and potential for the 1980s".
It states:
The watershed year is 1983. If major expenditure on replacement is not started by then the inevitable consequence will be a rapid rundown of the whole railway system. We could postpone until that date, continuing with some replacement and with much 'make do and mend' at present investment levels, but not beyond. In 1981 we must have started the design and planning work and have placed orders for materials if major re-equipment is to commence in 1983".
The statistics that I am about to quote are not the figments of a partisan politician's imagination. I did not write them. They were written by the British Railways Board, and signed by every member of that hoard. A notable signature is that of Sir David Serpell. The document describes what would happen to the system if no investment was forthcoming. It says that track mileage withdrawn from traffic would be 3,000 and rising rapidly. It says that the mileage carrying temporary speed restrictions was 180 in 1981, and would rise to 800. It pointed out that the annual failure rate of mechanical signalling, then at 4 per cent., would be 10 per cent. and rising. Resultant annual duration of train delays, 5,000 hours, would rise to 8,500 hours. Availability of locos, now 75 per cent., would drop to 50 per cent. Electrical multiple units at 85 per cent. would drop to 75 per cent.
So the dismal picture continues. It is no longer the crumbling edge of quality; it is the decaying core of the network. If the Secretary of State does not believe the British Railways Board, perhaps he ought to consult—if they were here—some of his hon. Friends whose commuter constituents are subjected to clapped-out railway stock, delays, and cancellations.
If we are to rectify the appalling decline, something must be done now. The beneficiaries of more investment would be not only the passengers, the freight business and private industry but the railway workshops where the labour force, with its traditions and loyalties, is uniquely placed to take up this challenge. There are 3,103 diesel muliple units which require to be replaced nationally. British Rail suggests that up to 1,000 of them could be replaced by the class 141 lightweight unit. The remainder would be required to be replaced by either the class 210


or a new design to present-day standards. By any test, therefore, it is obvious that there is work to be done on building and refurbishment and that the work needs to be done now.
Of those 1,000 DMUs, 640 operate into or within passenger transport executive areas; 400 of them would be the financial allocation of the PTEs. If this programme of DMU replacement were to go ahead, the passenger transport executives collectively would have to find an additional £8·1 million in section 20 grants. As I understand it, the Department of Transport has accepted that rolling stock replacement could be introduced into the transport policies and plans and that the cost of the section 20 grant would perhaps be increased because of the replacement of that rolling stock. However, I contend that that is a meaningless gesture because any passenger transport executive would, if it increased its section 20 grants, be penalised under what has become universally known as the Heseltine clawback or the block grant penalties, and might even be penalised—this has still to be decided as we have had no satisfactory answer yet—under the Government's new protected levels of expenditure introduced in the latest Transport Bill.
Having spoken to a number of people in passenger transport executives this morning, I can say that, apart from south Yorkshire where some work is going on, there is no sign that the Government are making finance available for the replacement of these vehicles.
We do not accept that the closure of the workshops is necessary, given that there is an unanswerable case, certainly in logic, for productive, non-inflationary investment in British Rail. We do not accept that there is a case for closure.
My hon. Friend the Member for Bishop Auckland (Mr. Foster), in a moving speech this afternoon, has left the House in no doubt about the consequences of the closure of the Shildon works. Behind the statistics lies a considerable sum of human misery which will face hundreds of families who depend on that workshop for their livelihood. Like my hon. Friend the Member for Glasgow, Springburn (Mr. Martin), I live in the constituency that I represent. In Horwich the picture is just the same. For the past 10 years I have had the honour and pleasure of representing the people of Horwich in the House. I know them well. I know what they have done. I have been round that workshop regularly. I know the efforts that have been made to increase productivity, to become efficient, to slim down, and to achieve craft interchangeability in order to meet the challenges of the future. I know that they are efficient, I know that they are hardworking and I know that they want to keep that workshop open.
In the town there are people working in the railway industry whose families have been attached to it for a generation. One family in four is associated with the workshops. There has been a railway workshop in the town since the beginning of the last century, making wagons and locomotives, repairing carriages and even, during the second world war, making tanks. Thousands of young men have been given an apprentice training in the vital skills of engineering. Currently 214 apprentices are employed at the Horwich loco works. Virtually no other organisation in the north-west region, apart from British Rail and British Aerospace, has provided engineering

apprenticeships. Almost everyone on the plant is a time-served craftsman: sheet metal workers, boilermakers, coppersmiths, joiners, electricians, fitters and turners. The seed corn of British industry is about to be thrown on the scrapheap as part of the manic economic experiment being conducted by this Government.
If the closure were to take place, unemployment in my town would go up to 46 per cent. My hon. Friends the Members for Bolton, East (Mr. Young), for Bolton, West (Mrs. Taylor) and for Bury and Radcliffe (Mr. White), who served his apprenticeship at Horwich loco works, have been closely involved in the prospective closure. We have attended meetings with the local authority and we have set up a team of people to look into the consequences of closure. My hon. Friend the Member for Bolton, East has spelt out those consequences and has shown that the total loss at BREL at Norwich will be £2,873,000. The cost to public funds of closing that workshop would, however, amount to £4 million in the first year. What a way to run a country, by putting people out of work, by creating higher unemployment and by having to pay for it from the national exchequer.
The Prime Minister always talks about freedom of choice. What freedom of choice have the people of Shildon, of Temple Mills or of my own town? They have none. They will go on to the scrapheap of unemployment. If they were given freedom of choice, they would choose to work. Nevertheless, they will have a choice, either this year or next. Together with the rest of the British people they will be given the choice of voting for a party that will keep the workshops open and that will vigorously pursue an alternative economic policy and put our people back to work.
That is why we shall go into the Lobby tonight not just in defence of jobs at Shildon, Horwich and Temple Mills but to demonstrate to the country that the Labour party is the only party committed to improving and modernising our railway network. I ask my right hon. and hon. Friends to join me in the Lobby to demonstrate that commitment.

The Under-Secretary of State for Transport (Mr. Reginald Eyre): Before replying to some of the misconceptions and even misrepresentations that have been heard in the debate, I wish to explain once again the real reasons why British Rail Engineering Ltd. and British Rail have taken these decisions with regard to Shildon, Horwich and Temple Mills.
The hon. Member for Westhoughton (Mr. Stott) ranged widely in his speech and made some unjustifiable accusations. I shall not pursue those accusations. I wish to deal with the issues affecting Shildon, Horwich and Temple Mills. They are important to our understanding of what is happening in our industrial areas as new products and new processes replace the old.

Mr. Arthur Lewis: The Minister has been an honourable Member for a long time. Has it not always been the custom and practice for the parties to be represented in the Chamber, at least for the ministerial reply? Will the hon. Gentleman put on record that, during the whole of the debate, not one Liberal Member has been in attendance and that the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) has been the only Social Democratic party Member present? Is it not time that these


parties carried out the normal practice of ensuring that their representatives are present to hear the Minister's winding-up speech?

Mr. Eyre: I appreciate the importance of the point made by the hon. Gentleman.
I want to relate my reply to the questions posed by the hon. Member for Bishop Auckland (Mr. Foster) and to the points made by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) and by my hon. Friend the Member for Hastings (Mr. Warren).
Ten years ago, British Rail's freight business required 220,000 wagons. They were the old-fashioned vacuum-braked wagons. The wagons had a relatively short life and needed a lot of maintenance. Since then the rail freight business has been revolutionised. With the introduction of the TOPS computer system and the adoption of larger wagons, the number of wagons needed to carry the same amount of traffic has been drastically reduced. Even by 1982 the total number of wagons needed had fallen to 70,000.
During the past decade British Rail has been re-equipping with the modern air-braked wagons built at BREL. By 1982, it had 22,000 of those wagons. In addition, many companies had invested in their own wagons, of which there were perhaps 18,000 in use on the railways. In all, therefore, the rail freight business now has new wagon equipment. Mostly, it is well under 10 years old. British Rail's investment is perhaps worth £500 million. These are important practical facts in understanding the problem.
British Rail has increasingly found that it can no longer operate competitively with the old wagonload style of operation. It has decided to withdraw entirely from that activity by 1984. It intends to carry all traffic either in train loads or by the modern timetabled Speedlink system. These dramatic changes have been important in contributing to the efficiency and competitiveness of rail freight. I understand the emphasis placed by the right hon. Member for Barrow-in-Furness (Mr. Booth) and others on the need for British Rail to be competitive in rail freight. The changes carry with them the reasons for the rapid decline in the work load for wagon builders and repairers. The air-braked wagons are more robust and can be expected to have a working life of more than 20 years. They are all relatively new and will not need replacement for many years. The old wagons are being rapidly phased out, so there remains little repair work load in respect of them.
Hon. Members must also recognise that the modern wagon fleet gains its efficiency from intensive use. Each wagon costs much the same as a heavy lorry. It is not the sort of equipment that can be left standing in sidings as additional storage capacity for the customer, which is the kind of thing that we all remember from the railways of the past.

Mr. Mike Thomas: I accept that argument, as I stated in my speech. However, the Government must take responsibility for the fact that the volume of freight transport, which amounted to 171 million tonnes in 1978, is down to 141 million tonnes in 1982, due partly to the recession but also to the policies of the Government.

Mr. Eyre: The hon. Gentleman fairly related a great deal of that reduction to the world recession. One also has to recognise, as I do coming from the industrial area of

Birmingham, that there has been a structural change in the nature of industry that affects the demand for steel. These are complicated factors with which I shall be dealing shortly.
The changes that the railways are making to face the challenges of the modern world must be welcome to all hon. Members. The re-equipping is now virtually complete. One can see the trend emerging by looking at the number of wagons that BREL has built in recent years. In 1981, it built nearly 2,000. In 1982, the figure was just under 1,000. This year it is expected to be below 100. For the next few years, British Rail envisages a need for only about 150 new wagons a year, depending on the amount of additional traffic it can win. Yet, at Shildon alone, British Rail has the capacity to build 1,500 wagons a year. [Interruption.] Plans are made, but they have to change according to the circumstances affecting them. I have tried to explain the dramatic technological change occurring in the railways.

Mr. Foster: Will the Minister answer the question that I asked: what is the latest forecast for the growth of the private sector fleet between now and 1986? During the last round of rail talks, the figure was envisaged to be 6,000. That figure represents four years' work for the Shildon work force.

Mr. Eyre: I understand that the estimate for the private rail fleet is about 300 a year. I hope that that information helps the hon. Gentleman.
I wish to deal now with maintenance and repairs where the effects on the work load have been nearly as dramatic. In 1981, the repair work load was nearly 15,000 wagons. This year, because of the technical changes that I have described, it will be just over 8,000 wagons. Next year, when the wagon load traffic stops, for railway reasons which I understand—it is the right action for the future—it will be smaller still. British Rail Engineering Ltd. as a whole still has the capacity to build more than 2,000 wagons a year and the capacity to repair 20,000 wagons. There is no way of avoiding the fact that a vast disparity exists between what it can supply and what its customer, British Rail, can actually use. I wish to emphasise this point. It was made by my right hon. Friend the Secretary of State in his opening speech. It is, however, clear from the speeches that have been made that hon. Members have not fully absorbed the implications of this technical change.
The problem is not that BREL's workshops are out of date or inefficient but that the modern freight business uses it wagons more efficiently. The result is that fewer new wagons and less repair work are needed. I ask hon. Members to put themselves in the position of the managers of BREL. They have very difficult decisions to make. What options do they face in that situation?
The serious point made by the hon. Member for Newcastle upon Tyne, East—his preservation suggestion about a two-year period for Shildon—sounded plausible, but it is not realistic against the background that I am describing in detail in an attempt to answer the hon. Gentleman's question. Not only that, but the hon. Gentleman's suggestion carries dangers for the other jobs in BREL. I shall come to that later.

Mr. Mike Thomas: The question I asked the Secretary of State does not seem to have been answered adequately, if I understand the hon. Gentleman correctly. If this is such


an unsatisfactory idea, why was it put forward by the BREL management on 9 March and discussed with the NUR, when I assume it moved towards agreement?

Mr. Eyre: My right hon. Friend made it quite clear that the Government have not been involved in any way with management decisions. I can only say to the hon. Gentleman that, to my knowledge, no one in management was entitled to put forward any view of that kind. I can only assume that it was not put forward officially.

Mr. Thomas: The hon. Gentleman cannot have it both ways. Either the management is running the company and put it forward on its own account—which we do not believe, but that is what the hon. Gentleman tells us—or the management is not responsible and only put forward the idea unofficially because the Minister did not approve it.

Mr. Eyre: The hon. Gentleman was suggesting earlier that a reprieve had been put forward. As I understand it, there were some negotiations between management, operating in its own right as management, and the unions about the rate of rundown, but it did not amount to a reprieve in the terms that the hon. Gentleman was describing. I shall not be drawn more than that. I have tried to explain the position with regard to management. I cannot be responsible for any misunderstandings that the hon. Gentleman may have about what went on at a lower level.
I turn now to the points that hon. Members have raised in the debate. Right hon. and hon. Members have quite properly asked why these workshops are being closed by BREL. I admit that these are sad decisions. I was conscious of the remarks made about local communities by the hon. Members for Westhoughton and for Bolton, East (Mr. Young), who emphasised again the difficulties in that situation. I want to set out BREL's reasons for these hard and difficult decisions.
First, with regard to Shildon, I agree very much with the remarks made by the right hon. Member for Barrow-in-Furness about the co-operation of the work force. This is a single-purpose works with a capacity to build 1,500 wagons a year and to repair 15,000 wagons a year. We have to compare this with a work load in the coming years which is expected to be only 150 new wagons, with maintenance of 7,000 to 8,000 wagons a year. This reduced work load can be handled by the multipurpose works at Doncaster with their present capacity.

Mr. Booth: I understood the hon. Gentleman to be talking about British Rail running down its wagon fleet to about 30,000 or 31,000. If Shildon were on a rebuild programme of only 150 wagons a year, that would be equivalent to replacing wagons every two centuries. Does the hon. Gentleman think that is a serious scenario?

Mr. Eyre: The right hon. Gentleman must take account of all the factors that I have mentioned, which the BREL management is doing. There is this great stock build-up of new wagons. The replacement programme takes account of that existing stock, which has to be distributed among the BREL workshops throughout the country. The BREL management is doing those calculations very carefully and responsibly. That is the reasoning that has led to these decisions.
The next sad decision relates to Horwich, where the situation is somewhat different. Horwich has only a limited work load of its own, and this has been topped up with overspill from Eastleigh and Wolverton. The more modern electrical multiple units which are to be introduced soon into the Manchester-Bury and Liverpool-Southport services have traditionally been maintained at Eastleigh. To maintain this modern rolling stock, which is to be built up at Horwich, would require duplication of maintenance facilities and stockholding. Both Eastleigh and Wolverton have sufficient capacity to handle all their own traditional work loads, so they no longer have surplus work to send to Horwich. BREL has therefore concluded that to keep the Horwich works open would mean wasteful duplication of facilities and overhead costs.
Like Shildon, Temple Mills is a single-purpose works repairing wagons and containers. Here I should say that I am grateful to the hon. Member for Newham, North-West (Mr. Lewis) for the tributes that he paid to war-time railwaymen. The Temple Mills work force has been reduced to 310, and the work load this year has failed to provide work for this number.
I appreciate the speech of my hon. Friend the Member for Huddersfield, West (Mr. Dickens). The Government are deeply concerned about the social consequences of any major closure of a business, whether it be a British Rail workshop or a private sector works. There are many ways in which Government Departments and agencies will be helping in the task of creating opportunities for new employment in the areas concerned.

Mr. Arthur Lewis: rose—

Mr. Eyre: The hon. Gentleman must forgive me if I do not give way. I have only a few minutes left.
I say to the hon. Member for Bishop Auckland that BREL has made it clear that it wishes to work through the local enterprise trusts with the local authorities and private firms to help in the process of creating new opportunities and work. Government Departments and agencies stand ready to play their part in tackling the difficult problems that these closures will create. They will need to cooperate and co-ordinate their activities with the local authorities, British Rail and private firms. That process can only start in earnest once it has been generally accepted that the railway workshops have to close. In these sad and difficult circumstances, I must say that Opposition parties are acting against the interests of local communities by pretending that solutions exist, thus delaying the positive work that others are ready to start in order to tackle the problems that follow from these decisions.
In the circumstances, I urge the House to reject the Opposition motion and to support the Government amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 209, Noes 280.

Division No. 96]
[7 pm


AYES


Abse, Leo
Benn, Rt Hon Tony


Alton, David
Bennett, Andrew(St'kp't N)


Anderson, Donald
Bidwell, Sydney


Archer, Rt Hon Peter
Booth, Rt Hon Albert


Ashley, Rt Hon Jack
Boothroyd, Miss Betty


Ashton, Joe
Bottomley, Rt Hon A.(M'b'ro)


Atkinson, N. (H'gey,)
Bray, Dr Jeremy


Barnett, Guy (Greenwich)
Brocklebank-Fowler, C.


Barnett, Rt Hon Joel (H'wd)
Brown, Hugh D. (Provan)






Brown, Ronald W. (H'ckn'y S)
Kaufman, Rt Hon Gerald


Brown, Ron (E'burgh, Leith)
Kerr, Russell


Buchan, Norman
Kilroy-Silk, Robert


Callaghan, Rt Hon J.
Lambie, David


Campbell, Ian
Lamond, James


Campbell-Savours, Dale
Leadbitter, Ted


Canavan, Dennis
Leighton, Ronald


Cant, R. B.
Lestor, Miss Joan


Carmichael, Neil
Lewis, Arthur (N'ham NW)


Carter-Jones, Lewis
Lewis, Ron (Carlisle)


Cartwright, John
Litherland, Robert


Clark, Dr David (S Shields)
Lofthouse, Geoffrey


Clarke,Thomas(C'b'dge, A'rie)
Lyon, Alexander (York)


Cocks, Rt Hon M. (B'stol S)
Lyons, Edward (Bradf'd W)


Cohen, Stanley
Mabon, Rt Hon Dr J. Dickson


Coleman, Donald
McDonald, Dr Oonagh


Concannon, Rt Hon J. D.
McElhone, Mrs Helen


Cook, Robin F.
McKay, Allen (Penistone)


Craigen, J. M, (G'gow, M'hill)
McKelvey, William


Crawshaw, Richard
MacKenzie, Rt Hon Gregor


Crowther, Stan
McTaggart, Robert


Cryer, Bob
Magee, Bryan


Cunliffe, Lawrence
Marshall, D(G'gow S'ton)


Cunningham, G. (Islington S)
Marshall, Dr Edmund (Goole)


Dalyell, Tam
Marshall, Jim (Leicester S)


Davidson, Arthur
Martin, M(G'gow S'burn)


Davies, Rt Hon Denzil (L'lli)
Mason, Rt Hon Roy


Davis, Clinton (Hackney C)
Maxton, John


Davis, Terry (B'ham, Stechf'd)
Maynard, Miss Joan


Deakins, Eric
Mikardo, Ian


Dean, Joseph (Leeds West)
Millan, Rt Hon Bruce


Dixon, Donald
Mitchell, R. C. (Soton Itchen)


Dobson, Frank
Morris, Rt Hon A. (W'shawe)


Dormand, Jack
Morris, Rt Hon C. (O'shaw)


Douglas, Dick
Morton, George


Dubs, Alfred
Moyle, Rt Hon Roland


Duffy, A. E. P.
Newens, Stanley


Dunnett, Jack
Oakes, Rt Hon Gordon


Dunwoody, Hon Mrs G.
Ogden, Eric


Eadie, Alex
O'Halloran, Michael


Eastham, Ken
O'Neill, Martin


Ellis, R. (NE D'bysh're)
Orme, Rt Hon Stanley


Ellis, Tom (Wrexham)
Palmer, Arthur


English, Michael
Park, George


Evans, John (Newton)
Parker, John


Ewing, Harry
Parry, Robert


Field, Frank
Pavitt, Laurie


Flannery, Martin
Pendry, Tom


Foot, Rt Hon Michael
Penhaligon, David


Ford, Ben
Pitt, William Henry


Forrester, John
Powell, Raymond (Ogmore)


Foster, Derek
Prescott, John


Foulkes, George
Price, C. (Lewisham W)


Fraser, J. (Lamb'th, N'w'd)
Race, Reg


Freeson, Rt Hon Reginald
Rees, Rt Hon M (Leeds S)


Freud, Clement
Richardson, Jo


Garrett, John (Norwich S)
Roberts, Albert (Normanton)


Gilbert, Rt Hon Dr John
Roberts, Allan (Bootle)


Golding, John
Roberts, Ernest (Hackney N)


Grant, John (Islington C)
Roberts, Gwilym (Cannock)


Hamilton, W. W. (C'tral Fife)
Robinson, G. (Coventry NW)


Harrison, Rt Hon Walter
Rooker, J. W.


Hattersley, Rt Hon Roy
Roper, John


Haynes, Frank
Ross, Ernest (Dundee West)


Holland, S. (L'b'th, Vauxh'll)
Ross, Stephen (Isle of Wight)


Home Robertson, John
Rowlands, Ted


Hooley, Frank
Ryman, John


Howell, Rt Hon D.
Sandelson, Neville


Howells, Geraint
Sever, John


Hoyle, Douglas
Sheldon, Rt Hon R.


Huckfield, Les
Shore, Rt Hon Peter


Hudson Davies, Gwilym E.
Short, Mrs Renée


Hughes, Roy (Newport)
Silkin, Rt Hon J. (Deptford)


Hughes, Simon (Bermondsey)
Silkin, Rt Hon S. C. (Dulwich)


Janner, Hon Greville
Skinner, Dennis


Jay, Rt Hon Douglas
Snape, Peter


John, Brynmor
Soley, Clive


Johnson, James (Hull West)
Spearing, Nigel


Johnson, Walter (Derby S)
Spellar, John Francis (B'ham)


Jones, Dan (Burnley)
Spriggs, Leslie





Stallard, A. W.
Welsh, Michael


Steel, Rt Hon David
White, Frank R.


Stoddart, David
White, J. (G'gow Pollok)


Stott, Roger
Whitehead, Phillip


Straw, Jack
Whitlock, William


Summerskill, Hon Dr Shirley
Wigley, Dafydd


Taylor, Mrs Ann (Bolton W)
Willey, Rt Hon Frederick


Thomas, Jeffrey (Abertillery)
Williams, Rt Hon A (S'sea W)


Thomas, Mike (Newcastle E)
Wilson, William (C'try SE)


Thomas, Dr R.(Carmarthen)
Winnick, David


Tilley, John
Woodall, Alec


Torney, Tom
Wright, Sheila


Varley, Rt Hon Eric G.
Young, David (Bolton E)


Wainwright, E.(Dearne V)



Wainwright, R.(Colne V)
Tellers for the Ayes:


Walker, Rt Hon H.(D'caster)
Mr. James Hamilton and


Watkins, David
Mr. Norman Hogg.


Weetch, Ken



NOES


Alexander, Richard
Dickens, Geoffrey


Alison, Rt Hon Michael
Dorrell, Stephen


Amery, Rt Hon Julian
Douglas-Hamilton, Lord J.


Ancram, Michael
Dover, Denshore


Arnold, Tom
du Cann, Rt Hon Edward


Aspinwall, Jack
Dunn, Robert (Dartford)


Atkins, Rt Hon H.(S'thorne)
Durant, Tony


Atkins, Robert(Preston N)
Dykes, Hugh


Baker, Kenneth(St.M'bone)
Eden, Rt Hon Sir John


Baker, Nicholas (N Dorset)
Edwards, Rt Hon N. (P'broke)


Banks, Robert
Eggar, Tim


Beaumont-Dark, Anthony
Emery, Sir Peter


Bendall, Vivian
Eyre, Reginald


Benyon, Thomas (A'don)
Fairbairn, Nicholas


Benyon, W. (Buckingham)
Fairgrieve, Sir Russell


Berry, Hon Anthony
Faith, Mrs Sheila


Best, Keith
Farr, John


Bevan, David Gilroy
Finsberg, Geoffrey


Biffen, Rt Hon John
Fisher, Sir Nigel


Biggs-Davison, Sir John
Fletcher, A. (Ed'nb'gh N)


Blackburn, John
Fletcher-Cooke, Sir Charles


Body, Richard
Fookes, Miss Janet


Bonsor, Sir Nicholas
Forman, Nigel


Bottomley, Peter (W'wich W)
Fowler, Rt Hon Norman


Bowden, Andrew
Fraser, Rt Hon Sir Hugh


Boyson, Dr Rhodes
Fraser, Peter (South Angus)


Braine, Sir Bernard
Fry, Peter


Bright, Graham
Gardiner, George (Reigate)


Brinton, Tim
Gardner, Sir Edward


Brittan, Rt. Hon. Leon
Garel-Jones, Tristan


Brooke, Hon Peter
Gilmour, Rt Hon Sir Ian


Brotherton, Michael
Glyn, Dr Alan


Brown, Michael(Brigg &amp; Sc'n)
Goodhart, Sir Philip


Bruce-Gardyne, John
Goodlad, Alastair


Bryan, Sir Paul
Gorst, John


Buchanan-Smith, Rt. Hon. A.
Gow, Ian


Buck, Antony
Gower, Sir Raymond


Budgen, Nick
Gray, Rt Hon Hamish


Burden, Sir Frederick
Greenway, Harry


Butcher, John
Griffiths, E.(B'y St. Edm'ds)


Carlisle, John (Luton West)
Griffiths, Peter (Portsm'th N)


Carlisle, Kenneth (Lincoln)
Grist, Ian


Carlisle, Rt Hon M. (R'c'n)
Grylls, Michael


Chalker, Mrs. Lynda
Gummer, John Selwyn


Channon, Rt. Hon. Paul
Hamilton, Hon A.


Chapman, Sydney
Hamilton, Michael (Salisbury)


Churchill, W. S.
Hampson, Dr Keith


Clark, Hon A. (Plym'th, S'n)
Hannam, John


Clark, Sir W. (Croydon S)
Haselhurst, Alan


Clarke, Kenneth (Rushcliffe)
Hastings, Stephen


Clegg, Sir Walter
Havers, Rt Hon Sir Michael


Cockeram, Eric
Hawkins, Sir Paul


Colvin, Michael
Hawksley, Warren


Cope, John
Hayhoe, Barney


Cormack, Patrick
Heath, Rt Hon Edward


Corrie, John
Heddle, John


Costain, Sir Albert
Henderson, Barry


Cranborne, Viscount
Hicks, Robert


Critchley, Julian
Higgins, Rt Hon Terence L.


Crouch, David
Hogg, Hon Douglas (Gr'th'm)






Holland, Philip (Carlton)
Mawby, Ray


Hooson, Tom
Maxwell-Hyslop, Robin


Hordern, Peter
Mayhew, Patrick


Howe, Rt Hon Sir Geoffrey
Meyer, Sir Anthony


Howell, Rt Hon D. (G'ldf'd)
Miller, Hal (B'grove)


Howell, Ralph (N Norfolk)
Mills, Iain (Meriden)


Hunt, David (Wirral)
Mills, Sir Peter (West Devon)


Hunt, John (Ravensbourne)
Miscampbell, Norman


Hurd, Rt Hon Douglas
Moate, Roger


Irvine, RtHon Bryant Godman
Monro, Sir Hector


Irving, Charles (Cheltenham)
Montgomery, Fergus


Jenkin, Rt Hon Patrick
Moore, John


Jopling, Rt Hon Michael
Morgan, Geraint


Joseph, Rt Hon Sir Keith
Morris, M. (N'hampton S)


Kaberry, Sir Donald
Morrison, Hon C. (Devizes)


Kellett-Bowman, Mrs Elaine
Morrison, Hon P. (Chester)


Kershaw, Sir Anthony
Mudd, David


Kimball, Sir Marcus
Murphy, Christopher


King, Rt Hon Tom
Myles, David


Kitson, Sir Timothy
Neale, Gerrard


Knight, Mrs Jill
Needham, Richard


Knox, David
Nelson, Anthony


Lang, Ian
Neubert, Michael


Langford-Holt, Sir John
Newton, Tony


Latham, Michael
Normanton, Tom


Lawrence, Ivan
Onslow, Cranley


Lee, John
Oppenheim, Rt Hon Mrs S.


Le Marchant, Spencer
Page, John (Harrow, West)


Lennox-Boyd, Hon Mark
Page, Richard (SW Herts)


Lester, Jim (Beeston)
Parris, Matthew


Lewis, Sir Kenneth (Rutland)
Patten, Christopher (Bath)


Lloyd, Ian (Havant &amp; W'loo)
Pawsey, James


Lloyd, Peter (Fareham)
Percival, Sir Ian


Loveridge, John
Pink, R. Bonner


Luce, Richard
Pollock, Alexander


Lyell, Nicholas
Porter, Barry


McCrindle, Robert
Prentice, Rt Hon Reg


Macfarlane, Neil
Price, Sir David (Eastleigh)


MacGregor, John
Proctor, K. Harvey


MacKay, John (Argyll)
Raison, Rt Hon Timothy


Macmillan, Rt Hon M.
Rathbone, Tim


McNair-Wilson, M. (N'bury)
Rees, Peter (Dover and Deal)


McNair-Wilson, P. (New F'st)
Rees-Davies, W. R.


McQuarrie, Albert
Renton, Tim


Major, John
Rhodes James, Robert


Marland, Paul
Rhys Williams, Sir Brandon


Marten, Rt Hon Neil
Ridley, Hon Nicholas


Mates, Michael
Ridsdale, Sir Julian


Maude, Rt Hon Sir Angus
Rifkind, Malcolm





Rippon, Rt Hon Geoffrey
Thompson, Donald


Roberts, Wyn (Conway)
Thorne, Neil (Ilford South)


Rossi, Hugh
Thornton, Malcolm


Rost, Peter
Townend, John (Bridlington)


Royle, Sir Anthony
Townsend, Cyril D, (B'heath)


Rumbold, Mrs A. C. R.
Viggers, Peter


Sainsbury, Hon Timothy
Waddington, David


St. John-Stevas, Rt Hon N.
Waldegrave, Hon William


Scott, Nicholas
Walker, Rt Hon P.(W'cester)


Shaw, Sir Michael (Scarb')
Walker, B. (Perth)


Shelton, William (Streatham)
Walker-Smith, Rt Hon Sir D.


Shepherd, Colin (Hereford)
Wall, Sir Patrick


Shepherd, Richard
Waller, Gary


Silvester, Fred
Walters, Dennis


Sims, Roger
Ward, John


Skeet, T. H. H.
Warren, Kenneth


Smith, Tim (Beaconsfield)
Watson, John


Speller, Tony
Wells, Bowen


Spence, John
Wells, John (Maidstone)


Spicer, Jim (West Dorset)
Wheeler, John


Sproat, Iain
Whitelaw, Rt Hon William


Squire, Robin
Whitney, Raymond


Stainton, Keith
Wickenden, Keith


Stanbrook, Ivor
Wiggin, Jerry


Stanley, John
Williams, D.(Montgomery)


Steen, Anthony
Winterton, Nicholas


Stewart, A.(E Renfrewshire)
Wolfson, Mark


Stewart, Ian (Hitchin)
Young, Sir George (Acton)


Stradling Thomas, J.
Younger, Rt Hon George


Tapsell, Peter



Tebbit, Rt Hon Norman
Tellers for the Noes:


Temple-Morris, Peter
Mr. Carol Mather and


Thomas, Rt Hon Peter
Mr. Robert Boscawen.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House recognises the need for British Rail Engineering Limited to rationalise its workshop capacity in the light of changed requirements; and supports vigorous and constructive measures by all concerned to promote alternative and durable employment in the areas affected.

Anderson Strathclyde

Mr. Bruce Milan: I beg to move,
That this House condemns the decision of the Minister for Trade to overturn the recommendation of the Monopolies and Mergers Commission that the takeover bid by Charter Consolidated for Anderson Strathclyde should not be permitted as being against the public interest and likely to have an adverse effect on employment, management effectiveness and labour relations; deplores the failure of the Secretary of State for Trade to declare his interest when the reference to the Commission was made; and expresses its support to the management, trade unions and workforce of Anderson Strathclyde in their unanimous opposition to the takeover and their determination to preserve Anderson Strathclyde as an independent, highly efficient and profitable engineering company.
The debate deals with the Government's decision to overturn the recommendation of the Monopolies and Mergers Commission that the takeover of Anderson Strathclyde by Charter Consolidated should be prevented from going ahead. If that bid succeeds, the net result is that a good, independent and well-managed Scottish company, with an excellent record in every category of its activities, will be taken over by a multinational controlled from overseas that is unwanted in Scotland and will remain unwanted in Scotland. The Government's decision has led to widespread hostility from the date of the announcement to the present, and that hostility has not abated one little bit in the past two or three months. The hostility has come from the management of Anderson Strathclyde, the chairman, the directors, the rest of the management, the work force and the trade unions who represent them.
The Government's decision has been widely criticised in the press, especially in Scotland, but not exclusively, because it is not exclusively a Scottish issue. The Government's decision goes against the express wishes and views of the Scottish Development Agency, the Scottish Council and virtually every strand of Scottish opinion. The decision has met with resistance from local authorities, which have continued their opposition to this day. Indeed, they met Ministers this afternoon. They had an interesting meeting with the Secretary of State for Scotland. As I understand the account of that meeting, when the local authorities expressed their bitter opposition to the takeover, the Secretary of State for Scotland agreed with them. He said that he stood by the evidence that was given to the Monopolies and Mergers Commission by the Scottish economic planning department. Hon. Members can read what that evidence was. It is contained in pages 43 to 45 of the report.
If the Secretary of State stands by that evidence, he is against the Government's decision. As the Secretary of State is in the Chamber, I put that point to him. Unfortunately, he is not going to take part in the debate. Hon. Members will wonder why. He is hiding behind the Minister for Trade, who will open the debate, and then he will hide behind one of his Under-Secretaries, who will reply. Is the Secretary of State in favour of the Government's decision? Does he support the decision that the Minister for Trade has taken on this matter?

Hon. Members: Answer the question.

Mr. Millan: Typically, the Secretary of State is dodging the issue. He gave bland assurances to the local authorities as recently as this afternoon, but when he is

asked publicly to state his views he dodges the question. Hon Members can assume only that the Secretary of State's presence means that he approves of the Government's decision on the takeover of this thriving Scottish engineering company.

Mr. Barry Henderson: rose—

Mr. Millan: The hon. Gentleman is not the Secretary of State and is not likely to be—not that he would not be an improvement on the present one. The Secretary of State is sheltering behind the Minister for Trade and the Under-Secretary of State for Scotland.
When this bid was originally made, Conservative Members were anxious to express their support for Anderson Strathclyde. The secretary of the Conservative group in the House, with Labour Members and those from the Scottish National party, saw the Director General of Fair Trading to ask that the merger should be referred. What has happened to the Scottish Tories since the announcement was made on 21 December? They have reneged on the commitments that they made at that time to defend the interests of Anderson Strathclyde. If they have any guts at all, some of them will defend Anderson Strathclyde in this debate.

Mr. Henderson: I thank the right hon. Gentleman for giving way as he has referred to Conservative Back Benchers. Does he accept that there can be support for Anderson Strathclyde without necessarily agreeing to Government intervention?

Mr. Millan: That is an example of Scottish Conservative Members defending Scotland's interests. That is typical of the way they behave.
The report and the decision raise many major issues about mergers policy, which I do not have time to speak about tonight. The Labour party will want to return to that subject on some future occasion. The Government's mergers policy is in a muddle. Britain has one of the most concentrated industrial patterns in any part of the industrialised world and much good it has done us in terms of industrial production and prosperity over the years. Most mergers, as is known from experience, do not have the advantages claimed for them at the time that they take place. This country must tighten up its merger laws and those wishing a merger to proceed must prove positive advantages, rather than those who oppose a merger having to demonstrate that there will be positive disadvantages. Those are issues that can be returned to on a future occasion. The Government's mergers policy is in an absolute mess.
Another major issue is the behaviour of the Secretary of State for Trade, Lord Cockfield. Unfortunately, because he is in the other place, he is not present to defend himself. The Government have pretended to act with candour in this affair. However, the last thing that Lord Cockfield has acted with is candour. His lack of candour has been supported by other Ministers. Lord Cockfield was appointed to his office on 6 April 1982. 30 April is the first relevant date when the bid was mooted. It was not until 25 May that he took some action about freezing his shares in Charter Consolidated. That occurred three weeks after the bid had been announced. The reference was made on 3 June by Lord Cockfield himself. I have the press notice with me. There is no mention in that notice or in any other document at that time that Lord Cockfield had an interest in Charter Consolidated.
The House was not told of that fact, and it should have been at the time of the reference on 3 June. That was bad enough. When the statement was made by the Minister for Trade on 21 December, saying that he was rejecting the recommendation of the Monopolies and Mergers Commission, there was no mention in that statement that Lord Cockfield did not take that decision because he had an interest in Charter Consolidated. Nor was there any mention that his junior Minister—the Minister for Consumer Affairs—who normally deals with these matters, was not taking the decision because he had been lobbied on behalf of Charter Consolidated. It was because my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) asked why the Minister was making the statement that the House learnt quite by chance that Lord Cockfield had an interest in Charter Consolidated. That fact was not willingly disclosed to the House and neither was it disclosed to anyone else.
That raises the problem of ministerial rules about shareholdings. No doubt some of my hon. Friends will wish to pursue that matter later on in the debate. Whether Lord Cockfield's integrity is in question or not, his lack of candour as a Minister is absolutely deplorable. The Government's lack of candour on this matter has also been absolutely deplorable.
The evidence given to the Monopolies and Mergers Commission on this takeover was overwhelmingly against it going ahead. If the record of Anderson Strathclyde is compared with the comparatively poor industrial record of Charter Consolidated, it is possible to see why the evidence was overwhelmingly in favour of Anderson Strathclyde.
Whether one looks at Anderson Strathclyde's sales, which have expanded rapidly in recent years; its export record; its new technology, using some of the most sophisticated technology in the United Kingdom under the flexible manufacturing system; its profitability; the quality of its management and labour relations; the efforts that the company makes in training its work force, or its efforts to sub-contract work to other firms in the west of Scotland, it stands out as an absolutely first-class independent Scottish engineering company. By comparison, Charter Consolidated's record is poor. That company does not have a record for dealing with its industrial subsidiaries in a way that leads to profitability.
When the Monopolies and Mergers Commission had heard the evidence given to it, its majority view was that the merger should not be allowed to go ahead. One might have expected that to be the end of the story. Never before has such a recommendation from the Monopolies and Mergers Commission been turned down by the Minister of the day. What has happened is unprecedented. This is the first time that the Government, have turned down a recommendation. Having heard the evidence, the commission found that if the merger went ahead, the adverse affects cited on page 68 of its report would be felt. There would be an adverse effect on the management effectiveness of the company and on its labour relations. The merger would diminish effective competition in the supply of goods and would have
an adverse affect upon employment in a relatively depressed part of the United Kingdom.
Given the level of unemployment in the Strathclyde region under this Government, I like the phrase

relatively depressed part of the United Kingdom".
However, those were the findings of the Monopolies and Mergers Commission.
The commission also said that there were no compensating advantages to set against those adverse effects. It said that there was nothing that Charter Consolidated could do that Anderson Strathclyde was not perfectly capable of doing itself, and has been doing without the help of Charter Consolidated. Indeed, Charter Consolidated has had a director on the board for the past couple of years, because of that company's holding in Anderson Strathclyde, but he has not contributed anything to that company's success. For all those reasons, the Monopolies and Mergers Commission reached its decision.
I should make it clear that that decision did not mean that the commission was asking for the so-called ring fence to be put round Scotland. None of the evidence from the company, the Scottish Development Agency, the Scottish Council or the Scottish Office argued for a ring fence round Scotland. Indeed, I am not arguing for such a fence tonight. However, it is perfectly proper to take account of regional considerations, because they are rightly specifically provided for in the Fair Trading Act. Those of us who have experience of good Scottish companies being taken over by foreign companies or by companies in other parts of the United Kingdom have very bitter recollections of what has so often happened to those thriving Scottish companies, despite all the assurances given at the time.
However, we did not use the ring fence argument in relation to the report, and I do not use that argument tonight.

Mr. Michael Ancram: As the right hon. Gentleman is not arguing for the ring fence round Scotland, will he tell us in what circumstances he would support the takeover of a Scottish company by an outside company?

Mr. Milian: I would support a takeover if there were advantages in it for the company being taken over or if there were any advantages for Scotland, but in this case it is all disadvantage and there is nothing by way of advantage. If the hon. Member for Edinburgh, South (Mr. Ancram), who is chairman of the Tory party in Scotland, has the interests of Scotland at heart, he will be in the Lobby with us tonight.
The minority report, which rejected the views of the majority, was so poor that one of the commission's members, Professor Bain—a well-respected figure in Scotland and a distinguished economist—resigned. The minority report said that there was a lot of speculation and that it did not believe that there would be any damage to management morale. Can the Minister honestly say that damage has not been done to management morale in the past two and a half months? Anderson Strathclyde should be doing the job in production, sales, exports and so on that it was set up to do, yet it has to spend its time fighting off an unwanted predator. That is damaging to management. The merger has also damaged industrial relations. Today, the trade unions have said that the unique agreements that they have with Anderson Strathclyde will not be persisted with if the company is taken over by Charter Consolidated.
The chairman of the commission said that there was nothing to worry about as far as industrial relations were concerned, but he was not even at the meeting of


commission when evidence was taken from the trade unions. He just did not attend that meeting. He was in no position to make a judgment, but he did so nevertheless. His judgment has proved completely wrong, just as the minority report's judgment that Charter Consolidated would not interfere with management decisions has been proved wrong. Charter Consolidated has tried to stop or to modify the acquisition of the National Mine Service Company of America by the management of Anderson Strathclyde. To say that after the takeover—if it goes ahead—everything will continue as before, and that the new owners will never interfere in any way, is rubbish. What is the point of the takeover unless in certain circumstances the new owners intend to intervene? Ultimate decision-making will be removed from Scotland to Charter Consolidated and ultimate control will rest not with the directors in London but with interests in South Africa.
The Government have given their reasons for turning down the recommendations. In addition to accepting the minority report, they said that the merger would give Anderson Strathclyde more access to capital. However, that was not even the reason given by the minority report. There was no suggestion in the minority report that that was a good reason for allowing the takeover. It is a bogus argument, and that is demonstrated by the large sums of capital involved in the acquisition of the National Mine Service Company of America, which is being undertaken without any difficulty by Anderson Strathclyde and without any financial assistance from Charter Consolidated.
Of course, the real reason for the Government's decision has not been given by the Minister for Trade. Indeed, I do not suppose that he will give us the reason tonight. The real reason—as I said on an earlier occasion—is that the Government have caved in to City interests. Those interests were dismayed and angered by what happened over the Royal Bank of Scotland attempted takeover. Allowing this takeover is an act of revenge and Anderson Strathclyde is being made the sacrificial victim because there are interests in the City that are supported by the Government that do not like interference in the operation of free market forces and, in particular, did not like the suggestion that an independent company in Scotland should be allowed to escape the rapacious attention of the City interests that Charter Consolidated and the other banks involved in the Royal Bank of Scotland takeover, represent. That is why the Government took the decision that they did.
The Government obtained the assurance that the registered company would stay in Scotland, but it is not even possible to move the registered company from Scotland. From his experience of business and company law, the Minister for Trade must know that his assurances are meaningless, because the whole of the company's operations could still be removed from Scotland. The fact that the registered office is in Scotland means nothing in itself. Of course, the Minister for Trade did not ask for any other assurances. I have had that confirmed again by a little meeting that he had with the local authorities earlier today. Indeed, it is not a question of not getting the assurances, because the Minister has never even asked for them. There is nothing in his statement and there is nothing in what has been said to the House by him or by the Prime Minister to suggest that he has asked for any assurances

about the continuation of Anderson Strathclyde as a genuine Scottish company, located in Scotland with its interests basically identified with those of Scotland.
The present position is that a bid from Charter Consolidated is outstanding. That bid will be decided on Thursday of this week. I hope very much that the shareholders of Anderson Strathclyde, who until now have supported what has been a very good management from their point of view, will continue to give that support and will turn down this bid so that it will not be accepted by the deadline date of 24 March.
There are still actions that the Government can take. The Government have been saying "We made the announcement when we took the decision but there is nothing that can be done now because it is all in the lap of the shareholders. What can we do? The debate has come too late." That comes from a Government who have steadfastly refused to have this debate, which is taking place in Opposition time. What humbug and hypocrisy it is for them to say "It is coming too late; what can we do?" But, so far as I can see—I hope that the Minister for Trade or the Under-Secretary will answer the point at the end of the debate—there is nothing in the Fair Trading Act 1973 to prevent the Minister for Trade from revoking the decision that he made on 21 December and deciding now, as I hope the House will press him to decide, to prevent this takeover going ahead. If, by Thursday of this week, this bid fails, it would be absolutely monstrous if the Government were to allow a further, higher bid to be made by Charter Consolidated.
The Government can step in now under the Fair Trading Act or under the Industry Act 1975, which has specific provisions to allow the Government to intervene where a major manufacturing facility in the United Kingdom is being taken over by a company controlled from abroad. Charter Consolidated is controlled from abroad—35·8 per cent. of its shares are held by a company, Minorco, which is located not in the United Kingdom but in that other thriving industrial country, Bermuda, a tax haven. Minorco itself is controlled ultimately by Anglo-American and De Beers, which are South African companies. Therefore, under the 1975 Act, the Government could intervene if they so desired. What is missing in this sorry affair is not the legal ability to intervene but the will on the part of Government to intervene. If they had the will they could act even now, despite the history of the past few months.
This has been a shabby affair ever since the Government made their decision on the Monopolies and Mergers Commission report. There is still time for the Government to redeem themselves, and if they had any vestige of decency they would do so tonight. In particular, there is still time for Tory Scottish Members of Parliament who, if they had any honesty and real concern for the interests of Scotland, would do something practical for Scotland by their votes in the Lobby this evening. I challenge them to join the Opposition in the Lobby to condemn the Government's behaviour and their miserable and squalid action in this affair. It can still be redeemed, and I ask my right hon. and hon. Friends to join me in the Lobby tonight.

The Minister for Trade (Mr. Peter Rees): We have heard a highly charged speech from the right hon. Member for Glasgow, Craigton (Mr. Millan). [Interruption.] We


shall see how devastated Conservative Members are before we arrive at a premature conclusion of the outcome of the debate. The right hon. Gentleman gave us a slightly inaccurate account of company law. He also overlaid it with highly charged statements. He said that the Government had caved in to City interests and that they had given way to an act of revenge.
I hope that I can make a rather less highly charged intervention. I hope that the House will forgive me if I approach the debate in a lower key. Indeed, I hope that I may be allowed to remind the House how the Fair Trading Act 1973 operates in relation to mergers—a matter which the right hon. Gentleman, with all his knowledge of accountancy and company law, shirked. In a sense, the Act dictates how a Minister should approach a decision of this type.
I say at once that I could foresee that this was likely to be a sensitive decision. I could foresee sensitivities north of the border. Although the right hon. Gentleman has disclaimed that this is a particularly Scottish debate, one has only to look at the Opposition Benches to note the limited representation of other parts of the United Kingdom. For all his disclaimers, the right hon. Gentleman is attempting to make this a Scottish debate and, as a Member representing an English constituency, I tip-toe in with a certain diffidence. However, I must master this diffidence and perhaps try to develop my main theme.

Mr. George Foulkes: rose—

Mr. Rees: I remind right hon. and hon. Members on the Opposition Benches that mergers, other than newspaper mergers, can be referred to the Monopolies and Mergers Commission if there is a monopoly situation. It is agreed—I did not hear anything to the contrary from the right hon. Gentleman—that no such situation is likely to be created here. Mergers can be referred to the Monopolies and Mergers Commission where the value of the assets taken over exceeds £15 million. That is the case here. The commission is required to consider whether a merger situation following an investigation has been created—again, it is common ground that such a situation was created—and, if so, whether the creation of that situation operates or may be expected to operate against the public interest. That is the issue that I must consider. That is the issue, I diffidently suggest, on which the House should focus tonight.
I should like also to emphasise that there is no obligation on any Minister in my Department to make such a reference and, if no reference is made, the merger goes through. As the right hon. Gentleman seems to be so exercised on this question, perhaps he will recognise that there was a reference to the Monopolies and Mergers Commission. I shall examine the outcome in a moment.
If the commission finds that the merger is not likely to operate against the public interest, the merger goes through without any further intervention by a Minister. If the commission reports that a proposed merger is likely to operate against the public interest, it falls to a Minister in my Department to consider the recommendation, to take account of any advice given to him by the Director General of Fair Trading and to consider whether the prejudicial effects of the merger can be remedied or cured in any way. The right hon. Gentleman obviously had close, not to say

instant, communication with the very distinguished group that came to see me at 6 pm and elicited from it that I said that I saw no way in which further assurances by Charter Consolidated could have assisted the situation. I think that I was in good company in reaching that conclusion, because that was the conclusion of the majority of the Monopolies and Mergers Commission. If the House doubts that, I refer it to paragraph 9.24 of the conclusions. That was the majority conclusion, but one assumes that the whole of the panel on that occasion devoted some thought to the possibility and concluded that no assurances could reasonably be asked which would cure the difficulties to which the majority drew attention and which the right hon. Gentleman has properly highlighted.
That was the position in which I found myself. I am bound to observe that, when I made my statement about the report on 22 December, many bad legal points were made about the Act.

Mr. Peter Archer: The Minister referred the House to paragraph 9.24, where the commission said that no assurances could prevent adverse effects arising. It did not say that if, nevertheless, the Minister intended the merger to go through there were no assurances that might at least mitigate the effects.

Mr. Rees: I had no intentions either way, as I shall develop shortly. If the right hon. and learned Member for Warley, West (Mr. Archer), who has an acute and well-framed legal mind—[Interruption.] I did not realise that hon. Gentlemen grudged my paying a tribute to a member of my profession who has occupied a distinguished place in Government as a Law Officer. I shall leave him to argue that out. [Interruption.] Right hon. and hon. Gentlemen are in a singularly churlish mood.

The Secretary of State for Scotland (Mr. George Younger): That is nothing new.

Mr. Rees: I am not privileged to take part in Scottish debates. This is a bit of an eye-opener to me. I am bound to extend my sympathy to my right hon. and hon. Friends who have to put up with this behaviour on all too many occasions. I only wonder at their continuing good humour.
We cannot devise any action which could have taken place for the purpose of remedying or preventing adverse effects. That would be a disadvantage if the merger took place.
If the Monopolies and Mergers Commission, after considerable thought and having looked at the matter dispassionately, could not find any assurances that could be asked for or any countervailing measures of that kind, it would have been idle for me to extract such assurances. I shall leave the right hon. and learned Gentleman, who I believe will seek to catch your eye, Mr. Deputy Speaker, to ponder a little more closely paragraph 9.24. He will then perhaps see the validity of my point.
Many bad legal points were made in December. It was suggested that I was bound to accept the decision of the majority of the Monopolies and Mergers Commission and that the only person who could decide on the report was my right hon. Friend the Secretary of State. I need only remind the House that these and many other points were put to the Divisional Court of the Queen's bench division by Anderson Strathclyde's counsel and were found to be utterly baseless. It is plainly for that reason that the Opposition have changed their ground to a singular degree.
I know that some hon. Gentlemen have scant regard for the courts, but the Government propose to operate by this country's laws, even if right hon. and hon. Gentlemen propose to operate outside the law.

Mr. John Maxton: It is disgraceful.

Mr. Foulkes: Disgraceful.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The right hon. Member for Glasgow, Craigton (Mr. Millan) had a fair hearing. The House must give the Minister a fair hearing.

Mr. Maxton: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to imply that Opposition Members break the law? It is an implication that the Minister should withdraw now.

Mr. Deputy Speaker: Order. Many hon. Members wish to take part in this important debate. Points of order will take up a great deal of time unnecessarily.

Mr. Rees: I shall move on from the legal issues that so exercise hon. Gentlemen below the Gangway. I suggest rather diffidently that the issues for debate are rather different.
I remind the House again of the facts. During the course of 1980 Charter Consolidated bought 10,775,000 shares in Anderson Strathclyde—28 per cent. of the equity. I should correct one fundamental error that has vitiated the analysis of the right hon. Member for Craigton. Charter Consolidated is not controlled, as far as we have been able to determine, from outside the United Kingdom. The right hon. Gentleman, as a trained accountant, should know that it would need a majority of the voting shares to pass control outside—

Mr. Milian: Under the 1975 Act, which I quoted, 30 per cent. allows intervention by the Government. In this case, Minorco has 35·8 per cent.

Mr. Rees: That was not the point that I was making. The right hon. Gentleman was trying to convey that Charter Consolidated was an alien company controlled from outside the United Kingdom. There may be a special definition in the Act to which the right hon. Gentleman refers. As "control" is generally understood, Charter Consolidated is controlled from within the United Kingdom.
As a consequence of the acquisition of shares, Charter Consolidated's finance director was appointed a non-executive director of Anderson Strathclyde in September 1980. In April 1982 Charter Consolidated made a bid for Anderson Strathclyde's remaining shares, which was rejected by Anderson Strathclyde's board. On that occasion Charter Consolidated's director had absented himself from the board's deliberations. On 2 June 1982 the proposed merger was referred to the Monopolies and Mergers Commission. At the end of November the commission reported to me.
The majority—four out of six—recommended that the merger should not be permitted on the ground that it might be expected to operate against the public interest. A minority of two, which included the chairman of the commission, dissented strongly from that conclusion. It was in those circumstances that I had to consider the appropriate decision.

Mr. Foulkes: Does the Minister think it significant that the chairman of the commission comes from the tax haven of Jersey; that Lord Cockfield has a home on the Isle of Man, where he has this so-called privileged anonymity; and that Charter Consolidated has a large number of shares in a company in Bermuda? Is that not an interesting reflection on the kind of people and interests on the Conservative Benches?

Mr. Rees: I knew that it was a mistake to give way to the hon. Gentleman. I plainly do not live in the same squalid world as he does.

Mr. William Hamilton: Rossminster.

Mr. Rees: It does not fall to me, nor, I suggest, to the right hon. Member for Craigton, to commend one company rather than another, or to comment on the track records, profitability, labour relations or the quality of management of either company except and in so far as any of those factors might be said to tell against the public interest.
The onus was and is on those who assert that this merger might prejudice public interest to establish their case, as, in effect, they are suggesting that I should take away the right of Anderson Strathclyde's shareholders to decide whether they will accept Charter Consolidated's bid. Strong evidence would be needed before I should take away that right. If the action that I took is approved by the House, it would still be open to Anderson Strathclyde's board to persuade its shareholders that the bid should be rejected. [Interruption.] For all the sound and fury and synthetic indignation from the Opposition Benches, the bid is not yet concluded. One of the ironies of the case is that at the moment the stock market price of Anderson Strathclyde's shares is a couple of points only below the latest offer price by Charter Consolidated. It is not for me to comment upon the implications of that.
I shall deal with the points on which the majority of the commission rested its conclusion. The first point was the adverse effect upon the management effectiveness of the company. The right hon. Member for Craigton said that the management was utterly distracted by the bid. Regrettably, that is a facet of a number of contested takeover bids. I did not, however, find that this was a point that oppressed previous Socialist Administrations. I note that the majority of the commission pointed out that this would result only in a short-run diminution in the management's effectiveness. The majority suggested that in the long run there might be conflicts of personality or policy, but that can happen in the best run companies, with or without a takeover. It is certainly the case in many contested bids. I do not attach overwhelming importance to that point.
The second point was the adverse effect upon labour relations. I am genuinely delighted that the existing management should have established such close ties with its work force. However, even the majority of the commission emphasised that any threat to this must depend upon whether there would be a change in management personnel or style. I am not prepared to assume that those changes would necessarily take place in the short term. I do not see why I should make that assumption.
The third point was that the merger would tend to diminish effective competition in the supply of goods, be contrary to the interests of purchasers of goods in the


United Kingdom and not promote competitive activity by Anderson Strathclyde in markets outside the United Kingdom. I notice that the right hon. Gentleman did not comment on this important point. Perhaps his right hon. and learned Friend will do so. In paragraph 9.5 the majority reported that
the proposed merger would not in itself have a direct effect on competition between persons supplying goods in the United Kingdom.
I can find no compelling evidence about the effect in markets outside the United Kingdom. The suggestion that the merger might have an effect on competition is not sustained, even by the conclusions of the majority.
The fourth point was that, even if Anderson Strathclyde's efficiency and commercial success were not adversely affected by the merger, it would have detrimental effects on the Scottish economy. I well understand the sensitivity of right hon. and hon. Members on both sides of the House about that point, but those matters have to be judged in the round. Many factors must be taken into account.
In passing, I draw attention to the fact that three of Anderson Strathclyde's works, admittedly forming the smaller part of its business, are not situated in Scotland. More fundamentally, there seems to be an unusual lack of confidence in Scottish entrepreneurial skills and dynamism. Are we to take it that there will be only a guarded welcome from Opposition Benches to overseas corporations that wish to set up subsidiaries in Scotland? Are we to take it that the right hon. Gentleman is not pleased by the proposal of Mitsubishi to set up in Livingston or Haddington?

Mr. Millan: indicated dissent.

Mr. Rees: It is all very well for the right hon. Gentleman to shake his head, but the argument that he advanced could just as readily be turned against those investors.

Mr. Jim Craigen: Will the Minister give way?

Mr. Rees: I shall not give way. I want to finish this point.
Are we to take it that if the Labour party, contrary to every hope and expectation, returns to power, it will reverse its policies of nationalisation and, for example, break up the British Steel Corporation or the National Coal Board into autonomous regional companies? For the right hon. Gentleman to advance the general proposition that the Labour party is against mergers is to fly in the face of the Labour party's history in that regard. While I am grateful to the members of the commission and while I am reluctant to criticise the conclusions of any members of the panel that considered the case, I am bound to say that I was not persuaded by the conclusions of the majority—

Mr. Dennis Canavan: Will the Minister give way?

Mr. Rees: Let me finish my sentence. I noted the views of the minority, which represented a root and branch dissent.

Mr. Foulkes: It is a majority mafia.

Mr. Rees: The hon. Gentleman obviously lived in Sicily, not Scotland, for most of his formative years.
I am also fortified in the view that I have reached by the advice that I have received from the Director General of Fair Trading. I have a discretion in this matter, as the courts have found. I could hardly found a confident decision on the divers conclusions of the Monopolies and Mergers Commission in this case.
I approached the case in the spirit of another report of the commission on the case of S and W Beriesford and the British Sugar Corporation merger. It said:
The question we have to consider is not merely whether there is a possibility that the merger will operate against the public interest. If only a possibility were required, hardly any merger could ever be allowed to proceed for it is very rarely that such a possibility can be quite excluded. The question is whether the evidence creates an expectation that the merger will operate against the public interest.
That has been my approach to this case.

Mr. Craigen: Why, given that catalogue of indifference on the part of the Minister, was the matter referred to the Monopolies and Mergers Commission in the first instance?

Mr. Rees: I should have thought that the point was self-evident. It was clearly going to be a point of sensitivity. It was clearly right that all the circumstances and facts should be carefully considered. To conclude that it would be wrong to have referred it to the commission is to fly in the face of the case that has just been advanced by the right hon. Member for Craigton.

Mr. Canavan: Will the Minister give way?

Mr. Rees: Reluctantly.

Mr. Canavan: I would rather make this point to Lord Cockfield, but we cannot get hold of him. Who was responsible for overturning the recommendation of the Monopolies and Mergers Commission? Did the Minister take the decision off his own back, did Lord Cockfield tell him what decision to make, or was it a collective decision by the Cabinet? If it was a collective decision by the Cabinet, did the Secretary of State for Scotland agree with the Minister of State?

Mr. Rees: It was my decision.

Mr. Canavan: Yours alone?

Mr. Rees: Mine alone. It was my decision alone. The hon. Gentleman seems to find it difficult to comprehend this simple proposition. I stand by it.
I turn with some distaste to the scurrilous attack by the right hon. Gentleman on my right hon. and noble Friend and the attack, which only reproduces that, in the motion. It is noticeable that the Opposition have now shifted their ground and do not attempt to assert—I do not know how they could have sustained it—that there was any impropriety on behalf of the Secretary of State as regards the decision that I took. If that is not so, I shall willingly give way to the right hon. Gentleman. If he is saying that there was impropriety, perhaps he will intervene now.

Mr. Millan: I was saying that there was impropriety, because the decision was never disclosed to the House or anywhere else. We dragged it out of the Government.

Mr. Rees: The right hon. Gentleman is now not asserting that the decision that was taken was influenced in any way. I am glad that that is on the record. I hope that the right hon. Gentleman's example will be followed by his hon. Friends when they speak in the debate. He is not


asserting that there was any impropriety about the decision. I shall come to the so-called lack of candour in a moment.

Dr. Jeremy Bray: Will the Minister give way?

Mr. Rees: I shall not give way. I know of the hon. Gentleman's keen interest in this matter. Later, if the hon. Gentleman feels it necessary to intervene, I shall give way to him, but I think that it would be helpful to him and to the House if I was allowed to develop my point.
Earlier there were all sorts of metaphysical points made that in some way my right hon. and noble Friend was vicariously responsible for my decision and that he should therefore have declared an interest, but in what way I am at a loss to know. The charge now is that apparently he should have declared an interest when the decision to refer the case to the commission was made in June last year. I have to tell the House that the decision was taken not by my right hon. and noble Friend but by my hon. Friend the Minister for Consumer Affairs.

Mr. Milian: rose—

Mr. Rees: The right hon. Gentleman will know that decisions in that regard are taken by the Department. If the right hon. Gentleman does not accept my point, no doubt he will say so.

Mr. Millan: rose—

Mr. Rees: I am telling the House what the position was. If the right hon. Gentleman does not accept it, no doubt—[HON. MEMBERS: "Give way."] I have made the point clear. I could not have made it clearer.

Mr. Millan: The press notice of 3 June 1982 from the Department of Trade states:
Lord Cockfield, Secretary of State for Trade, has "decided," in accordance with the recommendation of the Director General of Fair Trading, to refer the proposed acquisition by Charter Consolidated plc of Anderson Strathclyde plc to the Monopolies and Mergers Commission".
Lord Cockfield had "decided", according to the press notice. There was no disclaimer there.

Mr. Rees: If the right hon. Gentleman were to consult his right hon. and hon. Friends who have served in the Department of Trade and had to take such decisions, he would know that it is perfectly proper for such a decision, which is not of enormous significance, to be delegated to other Ministers in the Department. That is a decision to refer. It can be easily shown. My right hon. and noble Friend was in Canada at the time. In any event, the root principle in such cases is surely that the Minister should not be involved in such a decision if the consequences of the decision are likely to be of pecuniary advantage in a direct sense to him. The decision that might have advantaged my right hon. and noble Friend was not to accept the majority decision of the commission's conclusions, but to allow Charter Consolidated to renew its bid if it so wished. As I have already said, I took that decision and I did not at any time discuss it with my right hon. and noble Friend. The decision to refer the bid to the commission was made in June last year. In any event, it could not have given any advantage to my right hon. and noble Friend. It did not open the way to the bid. Indeed, it raised the possibility of the bid being blocked. That is why I am startled to hear disagreement from the Opposition about the proposition that the bid should be referred to the commission.

Dr. J. Dickson Mabon: Will the Minister give way?

Mr. Rees: No, I must press on.
The House might be interested to know the movement of share prices of Charter Consolidated at various relevant points. That will set the rather cheap sneers in their true context. [Interruption.] The hon. Member for Glasgow, Maryhill (Mr. Craigen) can give the House a lecture on public morality when he gets the chance. This is not the appropriate moment. The hon. Gentleman, who seems to have scant knowledge of the way in which markets work, might be interested to know that the pre-bid price of Charter Consolidated was about 250p. When Charter Consolidated's offer to Anderson Strathclyde was announced, its share price fell to 212p. When the reference to the Monopolies and Mergers Commission was made in June, the price fell further to 200p. It has just closed at 218p. So much for the cheap and unworthy sneers from the Opposition that my right hon. Friend and noble Friend either wanted to or could have profited.
The Opposition are bolstering a remarkably weak case on the main issue by a sustained, malevolent and entirely spurious attack on my right hon. and noble Friend, which any fair-minded person who has taken the trouble to study the facts would see through at once.

Mr. John Ryman: rose—

Mr. Rees: I decline to give way to the hon. Gentleman.

Mr. Ryman: rose—

Mr. Deputy Speaker: Order. The Minister is not giving way.

Mr. Rees: I regret that there is little time for other hon. Members to speak. I have been too generous in giving way.

Dr. Bray: Will the Minister explain why, on 22 December, he told me:
It was made clear at the time of the press statement that announced the decision why my right hon. and noble Friend had distanced himself from the report on the decision."—[Official Report, 22 December 1982; Vol. 34, c. 963.]
Is he aware that it was not until I asked the Prime Minister about Lord Cockfield's interest during Prime Minister's Question Time on the afternoon of 21 December that it became public knowledge, and the Prime Minister confirmed it? I became aware of it less than one hour beforehand, and I told the Prime Minister's office at once that I would raise the subject during Question Time. That is why she had the facts at Question Time. Even at 4.50 pm, the Department of Trade press office did not know or have any statement available from the Secretary of State as to whether he had an interest or in which company he had an interest. Will the Minister acknowledge that he misled the House in his statement of 22 December that it was clear at the time of the press statement that his right hon. and noble Friend had distanced himself from the report?

Mr. Rees: It is perfectly true that my right hon. and noble Friend had distanced himself from the report. The memory of the hon. Member for Motherwell and Wishaw (Dr. Bray) may be a little fallible. I understand that he rang my private office the day before and a full explanation of my right hon. and noble Friend's shareholding was given to him. Moreover, my right hon. Friend the Prime Minister, in her answer to the hon. Gentleman, gave the


full facts the day before I made my statement. Any suggestion that there was lack of candour is absolute nonsense.

Dr. Bray: rose—

Mr. Rees: No, I shall not give way.

Dr. Bray: rose—

Mr. Deputy Speaker: Order. I repeat that there is great interest in the debate and that many hon. Members wish to take part. Interventions and points of order take up time.

Mr. Rees: I hope that I may be allowed to conclude.

Dr. Bray: On a point of order, Mr. Deputy Speaker. I raise a point of order reluctantly, for all the reasons that you have given. It was on the afternoon of the release—

Mr. Deputy Speaker: Order. That is not a point of order for me.

Mr. Dennis Skinner: It needs saying anyway.

Mr. Rees: I should like to return to the real issue. I was not required to arbitrate between the past reputation and the present or future charms of either Anderson Strathclyde or Charter Consolidated. I was not concerned with the adequacy of the bid made by Charter Consolidated. I was solely concerned with whether a case had been made out that there was a real expectation of damage to the public interest should the merger go ahead. I think that the appropriate verdict, on all the evidence that was given, must be the peculiarly Scottish verdict of "not proven". On that basis, the decision as to whether the merger should go ahead should appropriately be left to the shareholders of Anderson Strathclyde.

Mr. William Hamilton: The House and the entire population of Scotland will be appalled by the Minister's performance. It was a sneering show of peppery incompetence and humbug. The Minister has not told the whole truth, and he knows it.

Mr. Canavan: The Minister has a guilty look on his face.

Mr. Hamilton: It is a squalid story of duplicity from beginning to end and from the top of the Department to the bottom. It demonstrates how little the Government care about Scottish opinion of whatever political shade.
My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) recalled that when we went to the Office of Fair Trading every political party was determined to do what it could to stop the merger. When the local authorities, trade unions and management saw us this afternoon and told us what had transpired between them and Scottish Ministers, they said that the Secretary of State for Scotland was on the side of Anderson Strathclyde and against the merger. My right hon. Friend the Member for Craigton challenged the Secretary of State to repeat it. What will he do? He ought to resign—this is a resigning matter if the merger goes through. Every Scottish Minister and every Back Bencher is committed to preventing the merger.

Mr. Bill Walker: The hon. Gentleman is making sweeping assertions without ascertaining the facts. It is just not true to say that every

Scottish Member of Parliament wanted the case to be referred to the Monopolies and Mergers Commission to prevent the takeover. The normal practice is to buy time to give the company concerned the opportunity to fend off the predator. We have done that before. It works.

Mr. Hamilton: I exclude from my proposition the party hack of party hacks. If the Government murdered his grandmother, the hon. Member for Perth and East Perthshire (Mr. Walker) would say they were quite right. The fact remains that, whoever one talks to in Scotland, whether it be the trade unions, the churches, the CBI, other organisations or individuals, no one who supports the proposed merger can be found. The only dishonourable exception is the hon. Member for Perth and East Perthshire.

Mr. Walker: Not dishonourable.

Mr. Hamilton: The hon. Gentleman can make his own little speech in due course.

Mr. Norman Hogg: Does my hon. Friend remember that, on the day that we went to the Office of Fair Trading, the spokesman for the Conservative party was the hon. Member for Aberdeenshire, East (Mr. McQuarrie), who is not here today? He was at great pains to point out that he and his colleagues were with us 100 per cent.

Mr. Hamilton: We all recall those exchanges in the City.
The Minister tried this evening to obscure the basic fact, which is as my right hon. Friend outlined in his statement, that massive public support in Scotland will be at risk if the merger goes through. There is an excellent Anderson Strathclyde factory in my constituency. It performs exactly as the Government say that it should: it is highly efficient, has increasing productivity, a wonderful export record and impressive industrial relations. If the merger goes through, what will be the state of industrial relations? There will be a reluctant work force, a reluctant management and a reluctant Scotland.
The Minister is wrong to say that it is a narrow Scottish national case, as the document makes perfectly clear. The document was produced by the management of Anderson Strathclyde for its shareholders, asking them to protect their investment. That is not a nationalist approach. It may be materialistic, but it is a sound approach for shareholders and management. The workers share that view. In an appeal to the shareholders, they stated:
Professor Andrew Bain resigned from the Monopolies and Mergers Commission in protest against the Government decision to overrule the Commission's recommendation that the proposed take-over should not be permitted.
The workers concluded:
It is the earnest request of the employees that shareholders retain their shares in Anderson Strathclyde and that we continue as a team to provide a continuing profit to yourselves and security of employment to employees.
It is of mutual concern and interest to employers, management, the economy of Scotland and of the United Kingdom that Anderson Strathclyde should continue to exist as an independent Scottish company, and Charter Consolidated has nothing to contribute to that effect. It has not proved that it can in any way improve the performance of Anderson Strathclyde, and the majority of members of the Monopolies and Mergers Commission came to that


conclusion. We still do not know why the Government, for the first time in the history of the commission, rejected the majority recommendation.
We suspect—it is no higher than that, and the Minister should not get shirty about it—the behaviour of the Secretary of State for Trade. It might well be a case for the Privileges Committee of the House of Commons to investigate the behaviour of the senior Minister concerned. Why did the senior Minister say, "I shall not take the decision"? He obviously thought that he might be under suspicion that his decision would not be objective. He handed the matter to the hon. and learned Gentleman. Why did he do that if he did not believe that his objectivity might be suspect? The Opposition believe that it is suspect. Such a senior Minister should be in this House. Had he been here, he would not have got away as lightly as he has.
I hope that the Minister does not underestimate the feeling on the matter throughout Scotland. It is not just a local issue but one of fundamental principle. The Government are the tool of big business and of the City. If the Scottish people believe that the Government will destroy another part of the Scottish economy for the sake of City interests, the Government had better look out. I believe that they made the decision they did because they have written off Scotland completely. They realise that they cannot gain a single seat in Scotland at the next election, and they might well lose some. They deserve to do so.

Mr. Michael Ancram: The hon. Member for Fife, Central (Mr. Hamilton) should wait until the next election to see whether his prediction comes true. I assure him that the Conservative party intends to win more than a single seat.
We have listened tonight to some of the most extraordinary remarks that I have ever heard from the Opposition Benches. If the debate is to serve the purpose for which it was intended when the Opposition proposed it, it is time to cut through the cant that we have heard from the Opposition. They hold the extraordinary view that the reports and findings of the Monopolies and Mergers Commission are sacrosanct, that there is no precedent for overturning them and that Ministers and Parliament should not question them. I challenge the right hon. Member for Glasgow, Craigton (Mr. Millan) to say whether, if the commission had decided the other way on this matter or on the Royal Bank of Scotland issue, he would have thrown up his hands in surrender and said, "That is an end to it." From what he has said, I doubt that very much. He knows full well that the commission is not a binding arbitration, but is there to advise the Government, and the Government have the right to make their decision later.

Mr. Millan: The hon. Gentleman is ignorant of the Fair Trading Act 1973. If the commission finds that a bid is not against the public interest, the Government have no power to intervene.

Mr. Ancram: The right hon. Gentleman knows that when the Royal Bank of Scotland was discussed several options were before the commission, and during that time he made it clear that he had only one view, which was to pursue that view as far as he could. To suggest tonight that

the commission's reports must be accepted at all costs is a strange statement from someone who once held the honourable position of Secretary of State for Scotland.
Another demonstration of the purpose of tonight's debate is the savage pursuit of the Secretary of State. Opposition Members love to pursue individuals, especially when they are not here to answer—[HON. MEMBERS: "He should be here."] Perhaps in some of the venom we see the secret of why the debate was proposed. I shall not mention some of the inferences made by the right hon. Gentleman about South Africa, but that, too, may have caused Opposition Members to call for this debate.
The most extraordinary matter of all is contained in the motion to which the right hon. Gentleman is a signatory, which refers to
support to the management, trade unions and workforce of Anderson Strathclyde in their unanimous opposition to the takeover and their determination to preserve Anderson Strathclyde as an independent, highly efficient and profitable engineering company.
What sudden conversion has come over Opposition Members that they now support profit? They never have in the past. What conversion has come over them that they are suddenly supporting independence? I did not know that that was part of the ideology of the Labour party. The Opposition are attempting to turn a serious question into a political football, and the vote that they will call tonight is a shabby political manoeuvre in that direction, and Conservative Members should treat it accordingly.

Mr. Donald Stewart: Does not the hon. Gentleman, as chairman of the Conservative party in Scotland, think it odd that on such an issue—which his hon. and learned Friend freely acknowledged was sensitive—there was no consultation with the Secretary of State for Scotland?

Mr. Ancram: If the right hon. Gentleman will wait, I shall make my speech in my own way, and he may well hear my view on that.
The first thing that must be established—my hon. and learned Friend the Minister for Trade has established it already—is that he had a right to make the decision as he did. Whatever may be the views on the decision, there can be no question but that he had the right to make it. The right hon. Member for Craigton, as Secretary of State for Scotland—

Mr. Dick Douglas: Does the hon. Member agree with the decision?

Mr. Ancram: If the hon. Member for Dunfermline (Mr. Douglas) will stop interrupting from a sedentary position and wait, he will hear what my view is. I have heard the question.
It is important that we establish, not only in the minds of hon. Members but outside the House, that the Minister had the right to make this decision just as much as the right hon. Member for Craigton, as Secretary of State for Scotland, had the right to make quasi-judicial decisions in planning matters.
However, I should like to ask my hon. and learned Friend the Minister for Trade one important question. My understanding is that some considerable time before the announcement was made about the decision Anderson Strathclyde requested in writing, in a letter that was delivered by hand to his Department, a meeting with him


to discuss the new developments. I am informed that at that time Anderson Strathclyde did not receive an acknowledgement or reply to the letter until some time after the announcement had been made. It would have been proper and courteous to see the management of Anderson Strathclyde in view of the fact that it was asking to discuss the new developments. I am sure that my hon. and learned Friend will agree that it is acceptable in judicial proceedings to allow for fresh and new evidence to be looked at. I wonder whether he or my hon. Friend the Under-Secretary of State for Scotland, who is to reply, could explain what happened on that occasion.
As to the merits of the case, the public interest is a difficult matter to define and depends in every case on the circumstances. Often, as is the case in this instance, it depends on the intentions of the company that is seeking to take over another company. This test of public interest can best be looked at in this way. There is a major distinction between the purchase of a garden to cultivate and of a field to harvest a crop. That is a question to which, in any takeover, it is essential we receive an answer. In essence, it is a problem of credibility. I have followed this debate and I have read the arguments of both sides. As a result, I have a large and personal doubt about whether, in this instance, Anderson Strathclyde is a garden to be cultivated or a crop to be harvested.
In a case where there is doubt, and doubt to the extent that there is in this case, the benefit of the doubt should be given to the status quo. My hon. and learned Friend the Minister raised the "not proven" point, but the effect of the not proven verdict in Scotland is to maintain the status quo, because a person is innocent until he is proved guilty. The doubts on this occasion should have resulted in that answer. It is not for the House or myself to make a judgment on that. [HON. MEMBERS: "Oh".] If hon. Members will contain themselves, I shall continue. It is now for the shareholders to decide. The shareholders also have it within their power to say that they have doubts, and perhaps it is for us, as elected representatives, to suggest to them that those doubts are worthy of them giving the benefit of the doubt to Anderson Strathclyde.
The financial prospects have already been mentioned. There can be no doubt that Anderson Strathclyde is a successful and profitable company—nobody questions that. The shareholders must ask themselves—this is not a question for the House—whether the claims made by Anderson Strathclyde or Charter Consolidated are more likely to benefit the company of which they are shareholders. This is a matter for them, and it is one on which our silence is preferable to our arguments.

Mr. Douglas: How will the hon. Member vote?

Mr. Ancram: If the hon. Member for Dunfermline contains himself, he will find out.
There is also the Scottish economic financial dimension. My hon. and learned Friend the Minister said that this was not a Scottish debate, but to a large extent it must be a debate about Scotland and the Scottish economy. This, unlike the financial prospect of the companies, is rightly a matter of interest to hon. Members. I trust that it is also a matter of interest to shareholders, particularly Scottish shareholders, and I hope that they will take the Scottish interests into account.
First, there is what might be called the Anglo-American factor. Certain allegations have been made that, were this merger to go through, business in America might be less keen to deal with Anderson Strathclyde and its subsidiaries there than if it were not to go through. This is a matter of significance for the company and the Scottish economy. I hope that the shareholders will weigh that carefully in their minds in coming to their judgment later this week.
Secondly, there are the general economic arguments. I can do no better than to quote the vital evidence in paragraph 7.12 in the Monopolies and Mergers Commission report given by the Scottish Economic Planning Department, where it says:
Even if Charter's intentions were good, the SEPD feared that Charter's interference and intervention would be incompatible with the management stability which Anderson Strathclyde required to consolidate and improve its position at home and abroad.
That is my view. It is the view of a Government Department, and I hope that when my hon. Friend replies tonight he will endorse it. The shareholders should not be in for a quick buck. Their job also is to view the wider issues. If the Minister endorses the evidence given by his Department, his influence will be much stronger than mine.

Mr. Deputy Speaker: It might be helpful to the House if I say that the Front Benches will seek to wind up the debate at half-past nine. There is a very large number of right hon. and hon. Gentlemen who wish to take part. I ask them please to bear the time in mind.

Dr. J. Dickson Mabon: I shall certainly heed your observation, Mr. Deputy Speaker.
I was confused by the remarks of the hon. Member for Edinburgh, South (Mr. Ancram). I do not know what he will do in the vote because the vote is clear. It is clear for my party because we have been demanding a debate on this subject for some time, in fact, since before Christmas. It is because of the division of time in the House of Commons that at the eleventh hour, unless we amend it, or at five minutes to the twelth hour, we are asked to vote on a subject which the House of Commons cannot determine. Such is the impotence of the House of Commons because of the inadequacies of the Opposition in relation to this matter. We should have been debating this months ago, and not tonight. [Interruption.] We do not determine these matters. [HON. MEMBERS: "Withdraw."] These matters are determined by the 44 Labour Members from Scotland rather than the 12 Members of my party. [HON. MEMBERS: "Withdraw."] We have not been—

Mr. Deputy Speaker: Order. The right hon. Gentleman has a right to be heard.

Dr. Mabon: We have not been allowed to discuss this for three months because of the incompetence of the Opposition, who have never been able to find the time to discuss it. These matters are too serious to be left to frivolous Oppositions who are incompetent in the way that they deal with the time at their disposal.

Mr. Arthur Lewis: On a point of order. Could you tell me, Mr. Deputy Speaker, whether there is any way that


I can, within the rules of order, point out that there has not been a Liberal or an SDP Member here during the whole of the debate?

Mr. Deputy Speaker: The hon. Gentleman knows that there is no way he can do that.

Dr. Mabon: That is not true because at least four of us have been here. That is a larger number, proportionately, than the 12 of the 44 Labour Members who are present. [Interruption.] If they do not mind, I am supposed to be on the side of the Opposition. May I get on with the argument? I am sorry that the Minister of State has gone; I do not blame him in the light of the nonsense that we have just heard and all the interruptions.
Back in December, as the hon. Member for Motherwell and Wishaw (Dr. Bray) discovered, we found out that the Secretary of State was abdicating his responsibilities in favour of the Minister of State. I have been a Minister on several occasions and I know what happens about one's private interests.
In the case we are discussing there was no declaration of interest. It is extraordinary that the Secretary of State for Trade should suddenly come upon an instance where he has to say "I am sorry, I cannot do this." In that circumstance the Secretary of State should have made a statement to the other place. That perfectly legitimate statement would have been reflected here, but that did not happen. Perhaps he forgot or perhaps his private office did not remind him. Who knows?
The fact is that it did not happen. Therefore, we had the extraordinary situation whereby the Secretary of State prided himself on having made the decision without recourse to any other Minister in the Government, including the Secretary of State for Scotland. I think the charge against him was of not willingly disclosing what he had said.
We know that these matters were never taken into account. The Minister should perhaps say to the Government that the Macmillan rules of 1959 are not adequate, and that when a Secretary of State has interests which he will not dispose of, there should be a mechanism for making a declaration. A person might be innocent or guilty but, if the Front Bench do not mind my saying this and will stop their muttering, Ministers should make a declaration at an early stage of their interests in various companies.
Even if they do not make a declaration on taking office, they should certainly do so when relevant papers come before them. A Secretary of State might say to a Minister of State, his deputy in the House of Commons, "I wish you would take the decision; I cannot because I have these interests on behalf of myself or my family." That seems reasonable. I do not expect the Minister to reply in detail but I hope he will accept that as a fair point.
Secondly, it is not unreasonable that Parliament, having seen the Minister's inability to make clear his position, should suspect the decision that he takes. Moreover, it is compounded by the fact that for the very first time a Secretary of State for Trade said, "No." I see that the right hon. Member for Battersea, North (Mr. Jay) is present. The President of the Board of Trade would say, "I am only supposed to say 'Yes.' I am never supposed to say 'No' to these recommendations." I may be wrong about that, but, even if I am, it was highly exceptional to turn down

the Monopolies and Mergers Commission recommendations. A Minister who is in a very dubious, doubtful, Caesar's wife position does not make the matter clear and gets the matter muddled. Of course he is totally innocent, but nevertheless he is very confused. Then, for the first time in British political history, he turns down the recommendation of a commission that has been established for nearly 50 years, with no explanation. It is quite extraordinary.
It is no wonder that the Government are in confusion tonight. It is no wonder that the hon. Member for Edinburgh, South made the confused speech that he did. He is the masochist of the Tory party in Scotland. He is beaten to death, and he almost rejoices in it. Here he is tonight trying to apologise for the Government. Let us be fair to him. He did not say that. He very seriously doubted the essence of the Government's decision and the way that it was arrived at.
The Under-Secretary must be alarmed that the chairman of the Tory party in Scotland is beginning to wonder what is going on. Undoubtedly, the matter has been mishandled by the Government—by the Secretary for Trade in the first instance, and now in what the Minister for Trade said tonight. The case that he put tonight was bad. He trembled, fumbled and lost his way. Normally he is a competent man. Clearly he was nervous about the case that he was presenting, and I am only sorry that he is not here to hear the criticism.
We shall support the Opposition motion tonight deploring all that has happened, but we are much more concerned about what will happen in the future. The House of Commons is not voting tonight. The shareholders are making up their minds. They will decide the future and how the company acts. All of us, whatever our partisan views, will want Anderson Srathclyde, without Charter, to do what it has promised to do in the submissions that were made to the shareholders. Incidentally, we demand that. If it wants to remain Anderson Strathclyde without Charter, we expect it to live up to every item in the submissions that it made to us.

Mr. David Marshall: The right hon. Gentleman complained earlier in his speech about the Opposition. Will he tell the House why and when an all-party approach originally went to the Director General of Fair Trading only the Conservative party, the Labour party and the SNP attended. Why did no Liberal or SDP Members come along on 25 May last?

Dr. Mabon: That is a good point, because it was a deliberate effort to make sure that we do not get anywhere. In fact, I had to insist on our presence today.

Mr. Norman Hogg: The right hon. Gentleman has made a serious statement. With whom did he insist that he should have a presence in this debate? I thought that all Members were equal, and that it was a matter for the Chair to call speakers.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The right hon. Gentleman certainly did not insist with the Chair.

Dr. Mabon: The presence was not in the House of Commons. Thank God, the Labour party does not govern the House of Commons. The presence is to deal with the representations of those outside the House who wish to see Members of Parliament. I utterly deplore this. I think it


quite wrong. If Scotland wants to make a case, it should make it to every elected Member, whoever he may be. Whatever the party prejudice of the moment, it is scandalous that any Members should be excluded from that process. As for the House of Commons, I am delighted that we are not suppressed and that we are allowed to speak in this debate as I am speaking now.
I hope that the motion will be carried. I do not know under what statutory obligation Ministers are obliged to reconsider their decision but I would like to think there was one, in which case I would also like to think the Under-Secretary, in reply, would say, "In our defeat we oblige the Minister for Trade to change his mind, to agree to reconsider it," and in that way affect the view of the shareholders. I doubt whether that will happen. The shareholders might be influenced by a vote tonight. It would be an extraordinary situation and one that I have never known in the House if a vote on Tuesday night were to affect the way people voted on Wednesday or Thursday on a company's takeover bid, but it might happen. It might affect Darlington; one never can tell.
Seriously, it is an extraordinary situation and an illustration of my point about its being far too late. This debate should have been held three months ago in order to persuade those concerned to change their votes in favour of the advantage to Anderson Strathclyde as such. We on the Opposition Benches have no doubt that Anderson Strathclyde should be supported and that this motion should be carried. What we are questioning, even if this motion is lost and if the Minister persists, is whether we will back up the efforts of those who will no doubt succeed in trying to promote the interests of Anderson Strathclyde, which are the interests of Scotland.

Dr. Bray: On a point of order, Mr. Deputy Speaker. If the House is debating the competence and integrity of the Minister for Trade—and it is only a three-hour debate—could steps be taken to ensure that the Minister is present?

Mr. Deputy Speaker: I am sure that the Government Front Bench heard that, but it is not a matter for me.

Sir Russell Fairgrieve: I trust that the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) will not object if, for the sake of others who wish to speak in this debate, I do not follow his arguments too closely. I hope that the same will apply to interventions. Before proceeding with my remarks, I should like to declare that I could well have interests in some of the companies that I shall mention.
I am concerned with the general nature of some of these recent decisions over Scottish companies rather than with particular cases. For example, the bid that we are discussing tonight is similar in many ways to two recent bids in Scotland—the attempt by Lonrho to take over the House of Fraser and, more recently, that of Standard Chartered of Hong Kong and Shanghai to take over the Royal Bank of Scotland. Now we have an attempt by Charter Consolidated to take over Anderson Strathclyde.
Whatever the merits or otherwise of those attempted takeovers, they were in no way creating monopolies or restrictive practices. It might well be said that they included instances of greater competition being introduced

into the market. The difficulty is the Fair Trading Act 1973, which is the successor to previous legislation on this subject and which covers the work of the Monopolies and Mergers Commission. The United States has anti-trust laws which are designed to prevent monopolies and restrictive practices, but our Act goes a good deal wider and enters other areas. I have it with me here. It runs to some 134 pages.

Mr. Canavan: Read it all out.

Sir Russell Fairgrieve: No chance.
The three bids to which I have referred all ended up by being dealt with in a few short sentences on page 61, which state that bids can be looked at if they are "against the public interest". This is a very subjective judgment to ask members of any commission to make.
I have just been before a committee of the commission which is looking at a bid of a completely different nature from the three that I have mentioned. I must pay tribute to its industry, integrity and hard work, and the detailed knowledge that it has acquired about the trade, the facts and the firms into which it was looking. We give the commission a more difficult task when we include the subjective issue "against the public interest".
As the takeover that we are considering is somewhat sub judice and is going on currently, I should like to look at its immediate predecessor, which gives some indication of the problems. It was not long ago that the directors of the Royal Bank of Scotland decided that it was in the interests of the bank, its customers, its employees and its future that it should merge with a larger organisation. Talks took place and an agreed merger with Standard Chartered was announced. Everyone was happy, including what might be termed the Establishment, the City and the Bank of England. Suddenly, there appeared on the scene another active entrepreneurial and go-ahead bidder by way of the Hong Kong and Shanghai Bank which offered a price about double—

Mr. Deputy Speaker: Order. The hon. Gentleman must relate his remarks to the narrow motion that is under discussion.

Sir Russell Fairgrieve: I think I can show you, Mr. Deputy Speaker, how close my remarks are related to the motion. The matter is similar to the present bid.
It was stated, as in the case of Charter Consolidated, that the headquarters of all its desired and ambitious operations into the European Common Market and elsewhere were to be situated in Edinburgh, not London. The Royal Bank's subsidiary, Williams and Glyn's, was to be expanded to become a real competitor of the English clearing banks. There was to be great potential for more jobs for Scots at home and abroad. It is interesting to recall that the Hong Kong and Shanghai bank was virtually founded and run by many Scots.
Like the present bid, this appeared to be far too much for the Bank of England, the City and the Establishment. Something had to be done. The poor old Monopolies and Mergers Commission was wheeled in, and, in due course, it declared the bid to be against the public interest. When one examines the Anderson Strathclyde—Charter consolidated situation in the light of other recent bids, I wonder seriously whether this Scotish ring fence mentality is not doing us harm. After all, we Scots have taken over


and run business all over the world. I cannot understand why we should become so much less confident and introspective in these matters.
I have been closely involved over the years with two large Scottish-based textile companies—William Baird, registered in Glasgow, and Dawson International, registered in Edinburgh. Both have substantial interests south of the border—one a recent acquisition. I should hate the thought of either being referred to the Monopolies and Mergers Commission for removing the firm's headquarters from England to Scotland, as seems to be the worry in reverse. We have always left the headquarters of the firm on its current site, and I gather that that is also the intention of Charter Consolidated with Anderson Strathclyde.
As regards the bid, I believe that, at the end of the day, it should be left to the shareholders to decide. They will take a mature decision in the interests of the company with all factors taken into account. It has to be remembered that Anderson Strathclyde's current operations are financed by a 30 per cent. shareholding capital stake from Charter Consolidated. I hope that the Minister, when giving his views and intentions, will mention also that if Standard Chartered, Hong Kong and Shanghai or any other suitor comes back to look at the Royal Bank of Scotland, or any other bank, the Government will consider the matter differently next time.

Dr. Jeremy Bray: The main issue is the future of Anderson Strathclyde and the employment of the people within it. But a relevant factor has become the judgment, competence and integrity of the Secretary of State and the Minister of State. It was on the morning of 21 December that the Department of Trade issued a press notice accompanying the publication of the report of the Monopolies and Mergers Commission, saying that the report was being overruled.
I was telephoned by Mr. Little, chief executive of Anderson Strathclyde, that morning and at once told that the Monopolies and Mergers Commission had recommended against the bid but was being overruled, as the press statement declared. I at once telephoned the Minister of State's office to seek confirmation, which was given to me. I inquired why he was handling it and I was told. This was after the press release and the press conference. The hon. and learned Gentleman's private secretary plainly thought that the Secretary of State's interest in Charter Consolidated or in one of the parties was known. I said that it certainly was not known to me. It was certainly not in the press statement. I subsequently checked with all the journalists I could find and all the news rooms and it was not known to any of them.
I therefore telephoned the Prime Minister's office and gave notice that I would seek to raise the matter in Prime Minister's Question Time, if I was called, and I was called. The right hon. Lady was well briefed and at once confirmed my statement that the Secretary of State had an interest.
The following day the Minister of State said in the House:
It was made clear at the time of the press statement that announced the decision why my right hon. and noble Friend had distanced himself from the report on the decision."—[Official Report, 22 December 1982; Vol. 34, c. 963.]
It was not made clear. The Minister of State misled the House and he has still sought to mislead the House this

evening despite the fact that I telephoned his office again today to refer the Minister of State to a letter from myself in the Financial Times giving the facts I have just set out. So there was ample opportunity for him to check the facts.
If the Minister of State's private office thought that this statement of declaration of interest had been made when it had not been made, somewhere between the drafting of the press release in the Minister of State's office and what was actually said to the press somebody intervened. I do not know who, but the only office with the authority to intervene presumably would have been the Secretary of State's office. Perhaps the Minister of State will say what intervention took place.

Mr. Peter Rees: No intervention took place.

Dr. Bray: In that case there was nothing in the statement as it went from the Minister of State's office to the press office with any reference to the Secretary of State's interest. Will the Minister of State now acknowledge that it was not made clear why his right hon. and noble Friend distanced himself from the decision? [HON. MEMBERS: "Answer."]

Mr. Deputy Speaker: Order. The hon. Member must be allowed to continue his speech.

Dr. Bray: The Minister of State—

Mr. James Hamilton: I wonder, Mr. Deputy Speaker, whether you would allow the Minister to make a statement to the House on whether he misled the House on that occasion. It is very important that we should know that tonight.

Dr. Bray: I should be happy to give way to the Minister of State. He is still not prepared to correct a misstatement that he made in the House on 22 December, and the House and his colleagues in the Government will judge his action. He has totally discredited himself by his performance in the House today and has further discredited himself by failing to correct the way in which he has misled the House. I do not think that the Minister of State, who has not been a Member of the House for as long as some hon. Members, is aware of the gravity of the position he is now taking.
The Minister of State, in his speech, ridiculed us on this side of the House for being unwilling to encourage overseas investment in Scotland. I first heard of the Charter Consolidated bid in a letter from the chief executive of Charter Consolidated. I wrote to him welcoming an interest in diversifying into mining machinery and suggesting that he set up a new company in Scotland to strengthen the Scottish engineering industry. But I said that Anderson Strathclyde was wholly capable of looking after itself and did not need any assistance from Charter Consolidated. The chief executive of Charter Consolidated did not have the courtesy to reply to that letter. There was a direct invitation to come to Scotland and he did not bother to reply to it.
The majority of Anderson Strathclyde employees work in my constituency and they are completely opposed to the bid by Charter Consolidated. The influence of Anderson Strathclyde stretches far beyond Motherwell, not only to the seven other factories in the United Kingdom but to the engineering industry as a whole. The very strong line taken by the Amalgamated Union of Engineering Workers, the Association of Scientific, Technical and Managerial Staffs and other unions is significant. The proposed takeover


threatens the independence and vigour of British engineering. It means that any successful British company will not be safe. Any marauding shareholder can threaten such a company's future and the security of it employees.
It is no accident that there has been such a strong reaction to the case of Anderson Strathclyde. The company's strength is shown by its superb performance at a time of recession, contrary to the statements made by Charter Consolidated, also a time of recession in the mining machinery industry. Through the co-operation of its employees the work of many years has borne fruit in the creditable increase in profits in 1982 and 1983.
With such a record Anderson Strathclyde does not need any help from Charter Consolidated in raising capital. As for the undertaking by Charter Consolidated not to interfere in the management of Anderson Strathclyde, it has done so already. On its own judgment, Anderson Strathclyde made a takeover bid for the National Mine Service Company,. Charter Consolidated used its power as a shareholder to try to block Anderson Strathclyde's freedom of manoeuvre. When it failed to do so and the management obtained the support of its shareholders for its tactics, Charter Consolidated at once told its competing subsidiary in America to cry off. There we have double evidence that Charter Consolidated interferes in the policies and practices of its subsidiary companies. It sought to block Anderson Strathclyde's move in Britain and when it failed it blocked the move of its subsidiary in the United States.
The opposition of Anderson Strathclyde's customers to a Charter Consolidated interest, both in Anderson Strathclyde and in National Mine Service Company is because Anglo American is a direct competitor of the main customers of those engineering companies. For a mining company to try to dominate the engineering suppliers of its competitors is plainly damaging to their interest. Commercial and industrial damage would undoubtedly be caused to Anderson Strathclyde were the Charter Consolidated bid to go through and that would have its effect on employment.
The bid upsets the delicate balance necessary for good industrial relations which are nowhere more necessary than in Scotland. Anderson Strathclyde has a good record which will be undermined if the shop stewards were to ask why they should put themselves out for such a marauding bunch of bidders from abroad. They will see that their management has been pushed around and they will ask why they should take into consideration the interests of Charter Consolidated which claims to have infinite financial resources.
The Minister relied on the case of S and W Berisford and the British Sugar Corporation. He did not say that he was quoting from the minority report, which appears to be the limit of his knowledge on the affairs of Anderson Strathclyde. He quoted the case of S and W Berisford and the British Sugar Corporation. It referred to the "mere possibility of damage". Professor Andrew Bain, in his letter of resignation to the Secretary of State for Trade, said:
The charge that the majority recommendation is based on general possibilities and risks is unwarranted. The views of the majority must be judged from the language they used in their report, rather than from unsubstantiated assertions in a note of

dissent. On the three most important issues the majority stated, not that there was a mere possibility of damage, but that damage was probable and would or could be expected".
The report states:
it is probable that there will be a loss of morale and motivation amongst the present executive directors and senior management sufficient to have an adverse effect on the company's performance … it seems to us that the merger would create conditions in which the present degree of co-operation of the labour force would not be forthcoming.
I share that judgment. The chairman of the Monopolies and Mergers Commission was totally wrong in his minority report. The Minister of State misled the House yet again by failing fully to inform the House of the fact that in the statement he was merely quoting a misunderstanding on the part of the chairman of the Monopolies and Mergers Commission which was refuted by Professor Andrew Bain in his letter to the Secretary of State.
This miserable bid does not deserve to go through. The Minister of State was wrong when he referred to the share price. It was 2p below the bid price. The present price is ex-dividend and is equivalent to a price of 204p on the terms of the Charter Consolidated bid. Little trading has taken place in the shares of Anderson Strathclyde. I trust that the bid will be as firmly rejected by the shareholders in Anderson Strathclyde as it is by all the employees in Anderson Strathclyde and by all hon. Members on this side of the House.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I ask for brevity in speeches as so many hon. Members have an interest in making a contribution to the debate.

Mr. Barry Henderson: I agree with the final words of the hon. Member for Motherwell and Wishaw (Dr. Bray). I have great and considerable respect for him, and I think that he sincerely believes all he has said in the debate. But in voicing his suspicions about my hon. and learned Friend the Minister for Trade, he moved into fairyland. Valuable social and economic benefits for a community, a region and a country flow from the mere existence of well-managed independent companies.
For that reason, I agree with the final part of the motion, and especially the part that refers to
an independent, highly efficient and profitable engineering company.
That comes ill from Socialists whose policies have destroyed thousands of such companies and whose nationalisations have destroyed any sense of independence. They have imposed highly centralised bureaucracies, usually in London, through protection of the state monopolies against the possibility of competition from independent companies, which would expose their inefficiencies and improve customer services, and through taxation, which has driven so many private companies into the arms of the multiples and the multinationals.
Much of today's unemployment stems from Lib-Lab policies which destroy the profitability of companies and reduce their capacity to invest. There are substantial benefits to be gained from the independent private enterprise companies, but the Monopolies and Mergers Commission group which produced the report does not appear to have obtained evidence to support that view. That is extremely disappointing. Perhaps they could have


acquired it from a distinguished Glasgow university graduate, Mr. John McEnery, who retired from the Department of Industry a couple of years ago and wrote a pamphlet for the Institute of Economic Affairs in September 1981 called "Manufacturing: Two Nations". Under the heading "The Autonomous company headquarters—`the new generator of wealth'" in that extremely interesting pamphlet, John McEnery refers to the
overriding importance of the successful independent British-located company headquarters and its associated design, research and development, marketing and financial functions, as an entity separate from the manufacturing processes which it controls and as a long-term generator of wealth and high-quality ancillary service employment. The nature of manufacturing processes in the modern world … are transitory and internationally mobile compared with headquarters functions.
The following bit is important. It states that the manufacturing processes
are in no way able to compensate, in wealth and jobs, any country or region that has an inadequate share of the headquarters functions involved in guiding or controlling them.
That is why I agree with the final part of the motion.
I should have liked the supporting evidence to have been brought out more clearly in the report of the Monopolies and Mergers Commission. That evidence came from the submission of Fife regional council and Kirkcaldy district council. They have a subsidiary of Anderson Strathclyde operating in Glenrothes in the constituency of the hon. Member for Fife, Central (Mr. Hamilton). Indeed, some of my constituents work there. In that submission the councils pointed out that two thirds of the redundancies in Fife in the past three or four years have been in branch factories, while the more locally based companies, such as Anderson Strathclyde in Glenrothes, have had a much more stable employment pattern—[Interruption.] I part from Opposition Members, however, because I believe that any objective reader of the Monopolies and Mergers Commission report must be driven, with the present state of the law, to the same conclusion as the Minister. I was not an objective reader. I do not want Anderson Strathclyde to be taken over by Charter Consolidated.

Mr. Canavan: Vote with us then.

Mr. Henderson: I want that splendid independent company to continue in existence. However, that is not the same as saying that there is a case for ministerial intervention. The minority report's final words are:
If the intention of Parliament is judged, as it must be, from the language of the Fair Trading Act, we do not consider that the general possibilities and risks upon which the recommendation in this case is based amount to such material as Parliament intended should lead to ministerial intervention.
In that conclusion one reads the somewhat shaky foundations on which the majority group came to its conclusion. I regret that. As a supporter of Anderson Strathclyde, I wholly reject the first part of the motion, criticising an essentially quasi judicial judgment that the Minister had to make and that he was extremely well equipped, and more equipped than many, to make.
Given the desire for brevity, I shall conclude by saying that there is a case for strengthening the legislation on mergers and for positively encouraging "de-mergers". Some recent management buy-outs may give us a hint of the way in which things will go. In his pamphlet "Manufacturing: Two Nations", John McEnery said:

De-merging by conglomerates should be facilitated by removing taxation disincentives, and should if necessary be financially encouraged … if it leads to new headquarters in regions with relatively low levels of service employment.
I would go further and say that in future legislation should go in the direction of saying, as McEnery does, that
in all significant industrial mergers, the onus should be placed on those proposing the merger to make the case that it would benefit the country's manufacturing capability and also not reduce autonomous service employment in regions lacking their due share of service employment.
I should like to see things going in that direction but that is not the state of the legislation and of the burden of proof in the report. As things stand, there is no justification for further ministerial intervention in this affair. I also hope, as seems increasingly likely, that Anderson Strathclyde will be successful not in fighting off the takeover bid but in proving by its continuing independent success that it was right to do so.

Mr. Douglas Jay: I do not think that I have ever heard a more unconvincing speech from the Government Front Bench than that of the Minister for Trade this evening. If that is the Government case, I am not surprised that the Secretary of State for Scotland did not have the courage to get to his feet.
My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) rightly pointed out the industrial damage which is naturally feared and is likely to be done to Scotland if the merger goes through. As the author of the legislation which first brought mergers within the sphere of the Monopolies and Mergers Commission, I would say that if I were a member of the commission I would have voted with the majority against allowing the merger to go through.
The motive behind many mergers is, in the end, to suppress competition. If there were more time, I could give a recent example from my constituency. In the case of Anderson Strathclyde—the case is not yet resolved by the shareholders—as a former investment adviser I would recommend shareholders, in their own interests, to refuse the offer from Charter Consolidated. Shares in a firm which has rapidly expanded its business and its profits in the past two years are not to be lightly thrown aside.
However, this debate raises the subsidiary issue of Ministers' holdings of industrial or commercial shares. I make no accusation of impropriety against the Secretary of State in making the decision, although I think that he acted foolishly and, on the evidence we have heard tonight, did not show an excess of candour, but I take issue with the Minister for Trade and I am sorry that he has left the Chamber.
In the debate on 22 December 1982 the Minister for Trade, when asked on the general principle whether economic Ministers would be wise to divest themselves altogether of shares in industrial or commercial companies when taking office, replied:
Carried to its logical conclusion, it would mean that Ministers in most Departments, because most Departments come in contact with quoted companies, would, before taking office, have to divest themselves of all quoted shares in case at any time in the future their Department might affect the conduct of that company. That is an absurd proposition that I am perfectly confident has never characterised the actions of Labour Ministers or of Conservative Ministers."—[Official Report, 22 December 1982; Vol. 34, c. 961]
I am afraid that the Minister broke the golden rule that politicians should not use the word "never". The Minister


may have been perfectly confident, but in this case he was wrong. That was precisely what I did when taking office at the Board of Trade. I divested myself of all such shares. So the Minister of State was also wrong in that case. That seems to be plain common sense and simple prudence. I would assume that all economic Ministers would do and have done the same because in this situation one must be above suspicion. One must be not merely impartial in that sense; one must appear to be impartial.
On 20 March 1980, in answer to my written question, the Prime Minister said:
The rules are based on the principle that Ministers must so order their affairs that no conflict arises, or appears to arise between their private interests and public duties.
After saying something about directorships she continued:
'There may also be exceptional cases where, even though no controlling interest is involved, the actual holding of particular shares in concerns closely associated with a Minister's own Department may create the danger of a conflict of interest: where a Minister considers this to be the case, he should divest himself of the holding —[0fficial Report, 20 March 1980; Vol. 981, c. 292.]
That is the established principle as laid down by the Prime Minister.
Unfortunately, in this case a conflict appeared to arise and therefore Ministers at least acted unwisely. It would have been far better if Ministers in this case, as in others, had stuck to the practice of divesting themselves of any such shares. Nowadays there are plenty of vehicles for savings other than industrial shares.
The statement by the Minister of State on 22 December leaves also the unfortunate impression that other Ministers, including economic Ministers, have continued to hold industrial and commercial shares after taking office. We were not told that in December. The Minister should tell us whether that is the case when he replies. If Ministers still retain such shares, they are acting unwisely and it would be far better were they to revert to the practice and standards laid down in the Prime Minister's statement and followed, at any rate by Labour Ministers, in the past.
I hope that the Minister will tell us not merely what practice other Ministers are now following, but that in the future they will adopt the more prudent and defensible practice followed in the past. I hope also that the Minister will tell us that the Government have done the wisest thing and reconsidered their position on this matter.

Mr. Gordon Wilson: My first impression of the debate is that those Scottish Conservatives who have spoken have proved themselves to be false friends of Anderson Strathclyde and Scotland. Where their interests lie will be tested tonight. They will have to choose between party and country. If they choose party, they will know that they are jeopardising the jobs of thousands of workers in Scotland. It will be their decision. They will also be jeopardising the future, such as it is, of their party in Scotland.
I was impressed by the presentation of the case for Anderson Strathclyde and by the Minister's failure to respond credibly. It was deeply unfortunate that when given the opportunity to respond to the hon. Member for Motherwell and Wishaw (Dr. Bray) about whether he had misled the House the Minister refused to say anything. He has proved his guilt by that silence.
The Government's actions have left an unpleasant taste in the mouth. If the Government thought that during the debate they would be able to launder their position, I tell the Minister and his colleagues that they have singularly failed to do so. A fishy smell is arising from this case. The Government have failed to get rid of it this evening.
Much more important than that is the future of industry in Scotland and the fact that a Monopolies and Mergers Commission report was for the first time in the history of that organisation overruled by a Minister. It is particularly unfortunate as the report on Anderson Strathclyde was the third in a row in which the commission was carving out fresh territory, showing how Scottish interests might be protected from predators from the south and beyond. It is no secret that in the Highland Distillers case, the Royal Bank of Scotland case and now in the Anderson Strathclyde case, Scottish companies were under attack and had no defence except through being protected by the Government. The commission has to decide the matter according to public interest. In the public interest there is no doubt that this company should be committed to remaining independent, autonomous and prosperous. It has succeeded on all the main fronts urged on private industry by the Government, yet it is being treated in a scabby way by them.
English Ministers do not take on board problems about external control. It is interesting that in each of the reports that I have mentioned the commission addresses itself to the problem of an economy that was becoming precariously based because bit by bit industry was being taken over and the leadership was passing from Scotland to other parts of the United Kingdom or beyond. A great deal of damage has been done by the Government overruling the commission.
I was extremely surprised when the Minister of State said that he did not regard this matter as one of the greatest importance and that he did not even consult the Secretary of State for Scotland or the Scottish Office. All he had to do was read the commission's report, which laid out the views of the Scottish Economic Planning Department. If the SEPD, representing the Scottish Office, had taken a strong stance in opposing the takeover, that Government viewpoint from Scotland should have taken precedence over the abstract, academic and City interests of the Minister of State operating from London.
There is an important question of Scottish control. I hope that the shareholders of Anderson Strathclyde will repudiate and refuse the offer made by Charter Consolidated because it is not in their interests that that company should pass into the hands of Charter Consolidated.
Nevertheless, we come back to the duty of the House and of the Government to decide those matters in the public interest. The Minister of State referred to the verdict of not proven, although by his own words and silence tonight he passed a verdict of guilty on himself and his Department. When there is a recommendation, albeit a majority one, by a body such as the commission, that should weigh with the Government. The burden of proof should have lain on Charter Consolidated to prove that its action would be beneficial to Scotland, Anderson Strathclyde and the workers. Charter Consolidated has failed to do that. The commission came out against the takeover. By that token, the Government should have done that.
The danger that we face in Scotland is that the branch office syndrome that we have had to face up to many times before will be increased if the company is taken over. Until tonight I hoped that the Conservative party in Scotland would be included with the management, the work force, the Scottish parties and the Scottish public in saying "No" to the takeover. The least that we can demand of the Government is that they revoke their decision and accede to the view that the Scottish view is paramount and that the takeover should be killed off in the Scottish interest.
The Government have been insensitive to the Scottish interest. We shall watch closely which way Members of Parliament vote and the actions of those who regard the matter as of so little importance that they have not bothered to turn up to vote on this extremely important issue in Scotland.

Mr. David Marshall: The Monopolies and Mergers Commission concluded that this takeover would have an adverse effect on employment in a depressed part of the United Kingdom and would operate against the public interest. In the few minutes that I have at my disposal, I hope to illustrate exactly why that should be the case, especially in the east end of Glasgow and my constituency.
The registered head office of Anderson Strathclyde is at 47 Broad street, Glasgow in the Shettleston constituency. It employs about 665 people, thus making it one of the largest employers in the east end of the city. Economically and industrially, it is extremely important to the east end of Glasgow and the rest of the country, as is the whole company to the economy of Scotland and the rest of the United Kingdom.
As many hon. Members have said, Anderson Strathclyde is a good employer, with a highly skilled and competent work force, excellent training facilities and industrial relations. It is a well-run and successful company, even in the recession that the Government have created. Unfortunately, its factory is surrounded by the empty sites of what were formerly thriving companies before they were taken over by or merged with other companies that were run from outside Scotland. Davy United and Dorada Croft were just two. Perhaps the classic example of takeovers was that of William Beardmore Ltd., which once employed 35,000 people worldwide, more than 15,000 of whom were at its headquarters at Parkhead, which is just down the road from the Anderson Strathclyde factory. Beardmore was taken over by Johnson Firth Brown of Sheffield a few years ago and, in December last year, it closed down its remaining operations at Parkhead, thus making many hundreds of people redundant and leaving a 64-acre eyesore in the east end of Glasgow.
That is what people fear will be the result of a takeover by Charter Consolidated, which has a record of asset-stripping. People fear that the merger will lead to an early closure of the Bridgeton factory. Charter Consolidated's record shows that its guarantees are not worth the paper that they are printed on.
Why do local people fear the loss of what some people may say is only 665 jobs? According to research note No. 98 from the House of Commons Library, male unemployment in my constituency in April 1981—the figures are already two years out of date—was the fifth highest in the United Kingdom at 30·9 per cent. Across the

road from the Anderson Strathclyde factory the neighbouring constituency of Glasgow, Central was second highest with 37·7 per cent. unemployment.
In a written reply on 4 March the Under-Secretary of State for Scotland produced unemployment figures for Wester Carntyne and Barrowfield which are in the immediate vicinity of the Anderson Strathclyde factory, and for the GEAR project area of severe deprivation that surrounds Anderson Strathclyde. The figures are worth quoting. Adult male unemployment was 54 per cent. in Wester Carntyne, 43 per cent. in Barrowfield and 30 per cent. in the GEAR area. Young male unemployment was 56 per cent. in Wester Carntyne, 63 per cent. in Barrowfield and 40 per cent. in the GEAR area. Young female unemployment was 60 per cent. in Western Carntyne, 46 per cent. in Barrowfield and 33 per cent. in the GEAR area.
Those shocking and disgraceful figures show exactly why people in Glasgow fear the takeover. All that it means to them is even more unemployment. What will those figures become if the merger goes ahead? That is why Glasgow district council, Strathclyde regional council, other local authorities, the Scottish Trades Union Congress and Scottish public opinion are all bitterly opposed to it.
I shall deal with the role of the lobbyist in this sorry affair. Charter Consolidated engaged the services of GJW, a firm of high-powered lobbyists, which I understand, is run by the former personal assistants of three prominent Members of Parliament. I am sorry that the Minister is not present. He keeps bobbing in and out of the debate. Perhaps he will not return as a Minister. Will ne tell us something about that anonomyous empire or the secret world of the lobbyist? Did they meet him or the Secretary of State for Trade? Who did they meet? What role did they play? What effect did they have on his decision? Will he also tell us whether Scotland is being paid back for successfully defeating the proposed takeover of the Royal Bank? Is it that South African interests are more important than Hong Kong interests? What about the interests of the workers of Anderson Strathclyde and the working people of Scotland?
If Charter Consolidated succeeds in taking over Anderson Strathclyde, I hope that the next Labour Government will speedily take the company into public ownership. The whole affair has been rather unsavoury—in fact, it stinks—and the sooner the Prime Minister appoints a new Secretary of State for Trade who will be answerable to the House, the better it will be for everyone.

Mr. Peter Archer: I shall not embellish what my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) has just said so movingly from his own local experience. The effects of a takeover bid for a flourishing, capable, locally based engineering company by a finance-orientated company with no Scottish connections were fully ventilated by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and by my other hon. Friends. I shall not rehearse their arguments, except to say that I was amazed that the Minister of State apparently believes that a company is not controlled from abroad when a foreign-based company holds 35 per cent. of its shares. If he believes that a 35 per cent. holding is insufficient for control when the other shares are fragmented, he has a naive idea of how


companies operate. Of course Charter Consolidated is a foreign-based company. I was also startled to discover that he fails to recognise the difference between a Japanese company establishing new business and new jobs in Scotland and the takeover of an existing company, but I shall leave the matter there.
I wish to consider the wider implications of the matter—first, the role of the Secretary of State for Trade. His financial integrity is not at issue in this debate. We have not suggested that his actions were motivated by his financial interests—I make no such allegation—but his actions are open to criticism on two grounds. First, he failed fully and at once to divest himself of his shares in Charter Consolidated. We criticise him for the reasons given by my right hon. Friend the Member for Battersea, North (Mr. Jay). It could have influenced his judgment in matters with which he was called upon to deal as Secretary of State.

Mr. Canavan: He should have resigned.

Mr. Archer: That is not just my view; it is not just the Opposition's view. As my hon. Friend the Member for Fife, Central (Mr. Hamilton) said, it is the view of the Secretary of State himself. The reason why the Secretary of State delegated to the Minister of State his powers in this case was that he believed that it would be wrong for him to take the decision. By retaining the shares, he was precluded from carrying out a duty which he would otherwise have carried out. He would have been better advised totally to divest himself of the shares. The matter reflects not on his integrity but on his judgment, and the Minister of State would have been better advised to admit that. It is a pity that the Secretary of State is in another place and cannot speak for himself here. In my experience, the House usually forgives errors of judgment by a Minister, especially when he does not have great political experience. The House finds it harder to forgive the persistent assertion that he was entitled to behave like that, that the Government are beyond reproach and that he and his colleagues would do the same again.
My second criticism is that the right hon. Gentleman failed to disclose all the facts when he delegated his powers to his junior Ministers. The better course would have been to announce publicly that he was delegating the powers, and the reason for it. Nothing was said in June 1982, and it now transpires that he had then already delegated his powers to the Minister for Consumer Affairs. That information was not contained in the press handout. Indeed, it was mentioned only after the commission had reported. Even then, no mention was made in that press handout in December of the reasons for the delegation. Those emerged only by the rather tortuous process outlined by my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray).
We must conclude that the Secretary of State was less than candid, and that the Minister was less than candid. The Government do not emerge from that with any credit.

Sir Russell Fairgrieve: What does all this mean to the industrial and commercial case for the takeover of Anderson Strathclyde?

Mr. Archer: If the hon. Gentleman will do me the favour of listening for a few moments, he will find that his

question will be answered. I am concerned principally about what emerges for some aspects of merger policy. The Fair Trading Act 1973, passed by a Conservative Administration, provides that, on a merger reference, the commission may be required to consider two things—first, whether a merger is being created, and secondly whether that has operated, or can be expected to operate, against the public interest. Section 84 says that in determining whether an operation is
against the public interest, the Commission shall take into account all matters which appear to them … to be relevant.
It then lists five matters which the commission should have particularly in mind.
It was considered by the Government who introduced that Act that a merger might affect the public interest in a number of ways which are not directly concerned with competition. The issue is not about competition but about public interest. A merger may affect the public interest. It may inhibit the discretion of the local management, and remove it to a board further away from the locality where the activities are carried on and so affect the capacity of the company to respond to the needs of its customers. A merger may lead to the transfer of some of the processes to a different area, so affecting jobs in the region. The company's technical expertise may be removed elsewhere, out of the region and possibly out of the country. A merger may destroy the good relations between a management and its work force by imposing different ways to deal with industrial relations, and by undermining the confidence which the work force has in a management that now has to refer every decision elsewhere, and it may give rise to a complicated chain of consequences. A merger may even have adverse effects on the interests of the shareholders who do not go along with the takeover. They too are at risk.
Those responsible for the 1973 Act believed that those were consequences which should be taken into account. The right of investors to sell or to buy should not be absolute, but should be subject to the right of someone to consider those other consequences to the economy and to the general public. That was the view of the Conservative Government in 1973, and the Labour party agrees with that. I suspect that this whole episode arises from the feeling of the Minister for Trade that he prefers to leave these matters to the mercy of the market. Indeed, the Under-Secretary, the hon. Member for Aberdeen, South (Mr. Sproat), has said as much. He has articulated the position, and the matter is in the open.
My right hon. Friend the Member for Craigton said that the Minister had caved in to the interests of those who stood to benefit from non-intervention. That is true, but it was not difficult to persuade him to go along with that. I suspect that the Government take the view, not only about mergers but about trade in general, that normally these things are better left to the market and those who buy and those who sell should be left free to make their bargains, and all those others who may be affected by the bargains must bear their misfortunes with fortitude. If the effect is to damage the economy, that is the sacrifice which we must make on the altar of freedom of contract. I suspect that the Under-Secretary did not intervene in the takeover because he was constitutionally reluctant to intervene in the affairs of the market.
The Labour party believes that the work force has a legitimate interest in the matter, as does the present


management of Anderson Strathclyde, the customers of Anderson Strathclyde, and the people of Scotland. That is the fundamental difference between us.
If it is legitimate to ask whether Charter Consolidated understands the engineering business and is interested in the economy, whether it is in the interests of the company that it should be introduced to another layer of managerial control, whether the two managements are likely to mix effectively, whether a merger would have an adverse effect on the career structure within the company, whether Charter Consolidated has a concern and feel for the region and the people of Scotland, whether it might have adverse effects on the views of customers abroad, whether the company is concerned with a conglomerate which has interests in South Africa, and whether all this is conducive to good relations within the work force—the issue then arises of who should direct his mind to answering them.
Who is in the best position to consider the implications of a possible merger for all these people? One view is that it should be the investors and that they should be relied upon to set aside their own interests and consider objectively the interests of all the other people who may be affected. I intend no disrespect to investors if I say that until this evening I had not heard anyone express that opinion, but the hon. Member for Edinburgh, South (Mr. Ancram) admitted to taking precisely that simplistic view.
Even those who believe that the affairs of the universe and the movements of the spheres are best left to market forces consider that those who are involved in the market are motivated by their own interest. It would be naive to ask them to consider the interests of others. That is what we mean by market forces; people are motivated by considerations of their own profit. To leave it to them would be a total abdication of any concern for the interests of all the other people. That is why legislation about mergers was passed by successive Governments.
The inquiry might be made by Ministers. It is arguable that balancing the interests of those involved entails political judgment. Some sections of the press are suggesting that the commission may not be an appropriate body to examine considerations of public interest. But if the matter is discussed by Ministers, it is discussed behind closed doors. We do not know who has spoken to a Minister or what he has said. That is true of many ministerial decisions, but here we are dealing with a decision which affects a specific company in a specific place and the issue relates to balancing the interests of particular groups.
Those who drafted the Act took the view that it was better that the inquiry should be conducted by people who are structured to hear evidence and the representations of those concerned, so that what is said may be known and that they do not discuss the matter in private with people who do not have to take responsibility for what they say. They have to behave in a judicial manner. That is the case for these matters being decided by a commission.
In particular, a commission is not susceptible to lobbyists. There are some matters on which Ministers may properly be lobbied, but where the interests of two groups of individuals have to be balanced it is not right that something should be said to a Minister over a brandy and soda in a golf club. Everyone should know what has been said. It should be possible for it to be tested and, if necessary, refuted.

Mr. Canavan: They refused to meet Anderson Strathclyde.

Mr. Archer: Yes, as my hon. Friend says, here they were prepared to be lobbied by one side but not by the other.
As I understand it, the reason why the Secretary of State did not delegate the decision ultimately to the Minister for Consumer Affairs was that he had been lobbied. I am not implying that he is to blame for that, but the purpose of lobbying him must have been to try to get him to bring his influence to bear. It is better that these matters should be decided by a commission.
If that is the best method of resolving the question, that entails a great many busy people giving a great deal of time to it. If, after they have read a great deal of evidence and after much deliberation, they reach a conclusion, surely that is not something to be lightly cast aside by a Minister after perusing a file. Of course, he may take a different view; the Act presupposes that. He must bring his own mind to bear, but surely he would set aside the conclusion of those who had devoted much care and attention to it only in the most exceptional cases. The hon. Member for Edinburgh, South said that that was an extraordinary view. It is the view taken by a succession of Secretaries of State of all political complexions, not just since the passing of the 1973 Act but in the 18 years since merger control has operated.
Surely the purpose of this method of merger control is to remove these decisions from the heat of political discussion. In this case, for the first time, the Minister of State dismissed six months of concentrated work by the commission. If that begins to happen, it will be difficult to find able, public people who are prepared to devote themselves to work such as this, simply to have it swept aside.
It is hardly surprising that Professor Bain thought it right to resign. It is hardly surprising that Mr. Eric Hammond saw fit to make the statement that he did. He said:
Why put the question to the Commission at all if a few hours consideration by a junior minister can reverse six months work of Commission members and staff—including numerous visits, interviews, hearings and masses of evidence from those concerned?
The Minister of State is a distinguished lawyer, but that is not the only experience and expertise which can contribute to a solution of these problems.
Mr. Hammond went on:
My opposition to the Merger was based on my industrial experience from shop floor to national level … The present wellbeing and future progress of Anderson Strathclyde is based on their investment programme and the co-operation of the workforce.
Again, we wonder why the Minister of State should see fit not only to brush aside all that work, but in doing so, in the statement that, he issued, to devote only two paragraphs to explaining why.
There is one final problem. In the note of dissent, the chairman and Mr. Lyons said that, in their view, the evidence did not justify concluding that the effects adverse to the public interest had been established. They said:
At no stage is the argument cast in terms of definitely foreseen results. It is all in terms of possibility, likelihood and risk.
So they argued that the case was not proved. It had not been shown conclusively that it would have those adverse effects.
However, it must often happen—more often than not—that the case against a merger is the risk that it creates that these things will happen. Of course we cannot be sure what will transpire. Indeed, that is precisely what damages confidence and morale. So what should happen if they are left in a state of doubt? There are two views about that. One is a view that we heard tonight from the Conservative Benches, the view that the right hon. and learned Gentleman has reiterated more than once: if at the end of the investigation one is not sure, if one is left with a feeling that things may work out badly for the public, the suppliers, the customers, the work force, but one cannot be certain, one should stand aside and let matters take their course. That is one view of what should happen if we are left in doubt.
The other view is that the merger may make an enormous difference to the company and the region, that the fate of many people may be decided in the privacy of a boardroom where they are not represented. It is a possible view that the onus should be on those who wish to bring about such traumatic changes to show positively that they are in the public interest, or at least to show positively that the public would not be any worse off.
I invite the Minister of State again to look at the matter. All that he has done so far has been to announce that he does not propose to make an order. As my right hon. Friend the Member for Craigton said, there is nothing in the Act to preclude him from looking at it again. We believe that there are many people whose futures will be closely affected by the merger. They have real anxieties, which we share. We believe that the Government's attitude on this matter typifies their attitude not only to merger policy generally but to the whole of economic policy. It typifies their approval of the rights of those who have property and their indifference to the effect upon others. It typifies their belief that matters should be left to take their course, and that Governments abdicate responsibility for what transpires. It typifies the fortitude with which they bear other people's problems. That is why we propose to divide the House tonight.

Mr. Canavan: On a point of order, Mr. Deputy Speaker. I do not think that you were in the Chair at the time, but earlier in the debate the Minister for Trade told me that it was his decision and his alone that overturned the recommendation of the Monopolies and Mergers Commission. Is it not, therefore, a gross contempt of the House for the last few minutes of this debate to be taken up with the irrelevant contribution of a junior Minister?

The Deputy Speaker: Order. The hon. Gentleman knows that that is not a point of order.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): The point just raised by the hon. Member for West Stirlingshire (Mr. Canavan) again emphasises the fact that, while hon. Members on the Opposition Benches have been demanding a debate on this subject for some time, they have spent so much time searching for a witch hunt that just is not there that they have largely ignored the considerations of the proposed merger, which is what interests their constituents as well as the work force and the company.
Before turning to the more significant questions, perhaps I can respond briefly to the right hon. Member for Battersea, North (Mr. Jay) who referred to an important matter. I must tell him that guidance to the generality of Government Ministers is clearly a matter, not for me, but for the Prime Minister. I cannot add to the answer that the Prime Minister gave to the right hon. Gentleman.
This debate has taken place at a time when the shareholders in Anderson Strathclyde are faced with a decision about the future control of their company. The timing of the debate is, therefore, appropriate because it reminds us that the legislation governing takeovers and mergers is based firmly on the principle that the prime responsibility for the activities undertaken by companies rests with the shareholders. This has always been so. Hon Members on the Opposition Benches who seem slightly surprised by that statement should remember that no Government, Labour or Conservative, have at any time sought to overturn the right of shareholders in this respect, and that although current legislation was introduced in 1973 it was not significantly altered by the Labour Government who came to office in 1974.
It is essential, if any market is to operate properly, that there should be a free flow of information to potential buyers and sellers, and in the present case both Charter Consolidated and Anderson Strathclyde are rightly taking every opportunity to put their assessment of the company's prospects before the shareholders. I welcome the robust way in which the Scottish company is putting its case and the extensive debate that this case has prompted in Scotland. It has helped to clarify the issues and will assist shareholders in reaching their decision on Thursday of this week.
The Fair Trading Act 1973 provides for Government intervention where a merger may be expected to operate against the public interest. It is frequently suggested, however, that Scottish opinion would like to see Scottish companies remain immune from any form of merger or takeover and that the takeover of any Scottish company is by definition against the public interest. That is not so. The long-standing reputation and extensive overseas activities of the financial community in Scotland belie such a narrow and parochial attitude. Our thriving financial services sector would never have developed in the way that it has if it had confined its attention to Scotland and ignored the opportunities overseas.

Mr. Gordon Wilson: Will the hon. Gentleman give way?

Mr. Fletcher: No, I will not. I am already short of time.
In addition, some of our most successful and technologically advanced companies have in the past few years been the subject of takeovers that have been welcomed in Scotland.

Mr. Foulkes: rose—

Mr. Fletcher: One example is that of Barr and Stroud, whose electronic and optical business is flourishing under the control of the Pilkington group.

Mr. Millian: rose—

Mr. Fletcher: No, I will not give way. The right hon. Gentleman had the full time to make his case, I have not.
Another example is that of MESL whose security systems business is thriving under Racal.
My hon. Friend the Member for Aberdeenshire, West (Sir R. Fairgrieve) mentioned the public interest. The attitude that my right hon. Friend the Secretary of State for Scotland and I take towards such merger proposals is closely linked to our attitude to regional policy. One of the reasons why successive Governments have been spending hundreds of millions of pounds a year on various forms of financial assistance to industry in the assisted areas of the United Kingdom, including Scotland, is the relative weakness of the companies sector in these areas. This has led to a lack of opportunities and a tendency for talented people to emigrate to London and the south-east. We regard the expenditure that we incur on regional policy in attracting overseas companies and strengthening indigenous companies as being clearly in the public interest.
Similarly, we regard selective intervention in merger cases, to achieve the same regional policy objectives, as being clearly in the public interest. I emphasise that such intervention must be selective. Otherwise, the fundamental working of the market would be unduly infringed.

Mr. Gordon Wilson: rose—

Mr. Fletcher: My hon. Friend the Member for Edinburgh, South (Mr. Ancram) asked about the evidence presented by the Scottish Office. In this case the Scottish economic planning department gave evidence to the Monopolies and Mergers Commission. That evidence did not favour the merger. My right hon. Friend—

Mr. Foulkes: Does the hon. Gentleman agree with it?

Mr. Fletcher: The hon. Member for South Ayrshire (Mr. Foulkes) should not get so excited. He should calm himself. My right hon. Friend and I stand by that evidence. We were speaking, of course, as we have spoken in many previous cases, from the view of the Scottish industrial interest. The commission is required to consider all of the interests involved. The Government, including my hon. and learned Friend the Minister for Trade, are also obliged to take a wider view. My hon. and learned Friend is bound to take particular account of the report of the commission as a whole. He is obliged by statute to have regard to the advice of the Director General of Fair Trading. As he has said, the report of the Monopolies and Mergers Commission was far from conclusive. In particular, it established that on straightforward competition grounds, there is no reason to intervene in the proposed merger. My hon. and learned Friend was bound to attach importance to the interests of the shareholders. Any Ministers in any Government should think carefully and have compelling reasons before intervening in the workings of the market, a point made by my hon. Friend the Member for Fife, East (Mr. Henderson).
It has been suggested that the Government's stance is inconsistent with that which we took in the case of the Royal Bank of Scotland a year ago. I do not accept that. First, the majority report on the Royal Bank mergers made clear that its recommendation against the mergers was tied to the particular circumstances of the case. It did not constitute opposition in principle to the takeover of Scottish financial institutions. It was on that basis that the Government accepted the commission's recommendations. Secondly—

Mr. Millan: rose—

Mr. Fletcher: The commission's report was, in that case—

Mr. Millan: rose—

Mr. Deputy Speaker: Order. If the Minister is not giving way, the right hon. Gentleman knows that he has to resume his seat.

Mr. Fletcher: It is obvious that Opposition Members do no want to hear a comparison with previous cases. That case was more conclusive, with four members including the chairman opposed to either merger and one of the other two—

Mr. Millan: On a point of order, Mr. Deputy Speaker. Is it not extraordinary that hon. Members have heard a statement from the Minister that bears only one reasonable interpretation—that he and the Secretary of State for Scotland disagree with the Government's decision?

Mr. Deputy Speaker: Order. The right hon. Gentleman knows that that is not a matter of order.

Mr. Fletcher: The simple truth is that each case is considered fully on its own merits. That is what could be expected. The hon. Member for Glasgow, Shettleston (Mr. Marshall) suggested, as did one or two other hon. Members, that the Charter merger would be bad news for Anderson Strathclyde. He suggested a much worse remedy—nationalisation. That alone should encourage my hon. Friends to vote against the motion on the Order Paper.

Question put:

The House divided: Ayes 209, Noes 282.

Division No. 97]
[10 pm


AYES


Abse, Leo
Dalyell, Tam


Allaun, Frank
Davidson, Arthur


Anderson, Donald
Davies, Rt Hon Denzil (L'lli)


Archer, Rt Hon Peter
Davis, Clinton (Hackney C)


Ashley, Rt Hon Jack
Davis, Terry (B'ham, Stachf'd)


Ashton, Joe
Deakins, Eric


Atkinson, N.(H'gey)
Dean, Joseph (Leeds West)


Barnett, Guy (Greenwich)
Dixon, Donald


Barnett, Rt Hon Joel (H'wd)
Dobson, Frank


Benn, Rt Hon Tony
Dormand, Jack


Bennett, Andrew(St'kp't N)
Douglas, Dick


Bidwell, Sydney
Dubs, Alfred


Booth, Rt Hon Albert
Duffy, A. E. P.


Boothroyd, Miss Betty
Dunnett, Jack


Bottomley, Rt Hon A.(M'b'ro)
Dunwoody, Hon Mrs G.


Bray, Dr Jeremy
Eadie, Alex


Brocklebank-Fowler, C.
Eastham, Ken


Brown, Hugh D. (Provan)
Ellis, R, (NE D'bysh're)


Brown, Ronald W. (H'ckn'y S)
Ellis, Tom (Wrexham)


Brown, Ron (E'burgh, Leith)
English, Michael


Buchan, Norman
Ennals, Rt Hon David


Callaghan, Rt Hon J.
Evans, John (Newton)


Campbell, Ian
Ewing, Harry


Campbell-Savours, Dale
Faulds, Andrew


Canavan, Dennis
Field, Frank


Cant, R. B.
Flannery, Martin


Carmichael, Neil
Ford, Ben


Carter-Jones, Lewis
Forrester, John


Cartwright, John
Foulkes, George


Clark, Dr David (S Shields)
Fraser, J. (Lamb'th, N'w'd)


Clarke.Thomas(C'b'atsre, A'rie)
Freeson, Rt Hon Reginald


Cocks, Rt Hon M. (B'stol S)
Freud, Clement


Cohen, Stanley
Garrett, John (Norwich S)


Coleman, Donald
Gilbert, Rt Hon Dr John


Concannon, Rt Hon J. D.
Golding, John


Cook, Robin F.
Grant, John (Islington C)


Craigen, J. M. (G'gow, M'hill)
Hamilton, James (Bothwell)


Crawshaw, Richard
Hamilton, W. W. (C'tral Fife)


Crowther, Stan
Harrison, Rt Hon Walter


Cryer, Bob
Hattersley, Rt Hon Roy


Cunliffe, Lawrence
Haynes, Frank


Cunningham, G. (Islington S)
Hogg, N. (E Dunb't'nshire)






Holland, S. (L'b'th, Vauxh'll)
Prescott, John


Home Robertson, John
Price, C. (Lewisham W)


Hooley, Frank
Race, Reg


Howell, Rt Hon D.
Rees, Rt Hon M (Leeds S)


Howells, Geraint
Richardson, Jo


Hoyle, Douglas
Roberts, Albert (Normanton)


Huckfield, Les
Roberts, Allan (Bootle)


Hudson Davies, Gwilym E.
Roberts, Ernest (Hackney N)


Hughes, Robert (Aberdeen N)
Roberts, Gwilym (Cannock)


Hughes, Roy (Newport)
Robertson, George


Hughes, Simon (Bermondsey)
Robinson, G. (Coventry NW)


Janner, Hon Greville
Rooker, J. W.


Jay, Rt Hon Douglas
Roper, John


John, Brynmor
Ross, Ernest (Dundee West)


Johnson, James (Hull West)
Ross, Stephen (Isle of Wight)


Johnson, Walter (Derby S)
Rowlands, Ted


Jones, Barry (East Flint)
Ryman, John


Jones, Dan (Burnley)
Sandelson, Neville


Kaufman, Rt Hon Gerald
Sever, John


Kerr, Russell
Sheldon, Rt Hon R.


Kilroy-Silk, Robert
Shore, Rt Hon Peter


Lambie, David
Short, Mrs Renée


Lamond, James
Silkin, Rt Hon J. (Deptford)


Leadbitter, Ted
Silkin, Rt Hon S. C. (Dulwich)


Lewis, Arthur (N'ham NW)
Skinner, Dennis


Lewis, Ron (Carlisle)
Snape, Peter


Litherland, Robert
Soley, Clive


Lofthouse, Geoffrey
Spearing, Nigel


Lyon, Alexander (York)
Spellar, John Francis (B'ham)


Lyons, Edward (Bradf'd W)
Spriggs, Leslie


Mabon, Rt Hon Dr J. Dickson
Stallard, A. W.


McDonald, Dr Oonagh
Stewart, Rt Hon D. (W Isles)


McElhone, Mrs Helen
Stoddart, David


McKelvey, William
Stott, Roger


MacKenzie, Rt Hon Gregor
Strang, Gavin


Maclennan, Robert
Straw, Jack


McTaggart, Robert
Summerskill, Hon Dr Shirley


Magee, Bryan
Taylor, Mrs Ann (Bolton W)


Marshall, D(G'gow S'ton)
Thomas, Dr R.(Carmarthen)


Marshall, Dr Edmund (Goole)
Tilley, John


Marshall, Jim (Leicester S)
Torney, Tom


Martin, M(G'gow S'burn)
Varley, Rt Hon Eric G.


Mason, Rt Hon Roy
Wainwright, E.(Dearne V)


Maxton, John
Wainwright, R.(Colne V)


Maynard, Miss Joan
Walker, Rt Hon H.(D'caster)


Mikardo, Ian
Watkins, David


Millan, Rt Hon Bruce
Welsh, Michael


Mitchell, R. C. (Soton Itchen)
White, Frank R.


Morris, Rt Hon A. (W'shawe)
White, J. (G'gow Pollok)


Morris, Rt Hon C. (O'shaw)
Whitehead, Phillip


Morton, George
Whitlock, William


Moyle, Rt Hon Roland
Wigley, Dafydd


Newens, Stanley
Willey, Rt Hon Frederick


Oakes, Rt Hon Gordon
Williams, Rt Hon A.(S'sea W)


O'Halloran, Michael
Wilson, Gordon (Dundee E)


O'Neill, Martin
Wilson, William (C'try SE)


Orme, Rt Hon Stanley
Winnick, David


Palmer, Arthur
Woodall, Alec


Park, George
Wright, Sheila


Parker, John
Young, David (Bolton E)


Parry, Robert



Pavitt, Laurie
Tellers for the Ayes:


Pendry, Tom
Mr. Ron Leighton and


Penhaligon, David
Mr. Allen McKay.


Powell, Raymond (Ogmore)



NOES


Aitken, Jonathan
Bendall, Vivian


Alexander, Richard
Benyon, Thomas (A'don)


Alison, Rt Hon Michael
Benyon, W. (Buckingham)


Amery, Rt Hon Julian
Berry, Hon Anthony


Ancram, Michael
Best, Keith


Arnold, Tom
Bevan, David Gilroy


Aspinwall, Jack
Biggs-Davison, Sir John


Atkins, Rt Hon H.(S'thorne)
Blackburn, John


Atkins, Robert (Preston N)
Body, Richard


Baker, Kenneth(St.M'bone)
Bonsor, Sir Nicholas


Baker, Nicholas (N Dorset)
Bottomley, Peter (W'wich W)


Banks, Robert
Bowden, Andrew


Beaumont-Dark, Anthony
Boyson, Dr Rhodes





Braine, Sir Bernard
Hannam, John


Bright, Graham
Haselhurst, Alan


Brinton, Tim
Hastings, Stephen


Brittan, Rt. Hon. Leon
Havers, Rt Hon Sir Michael


Brooke, Hon Peter
Hawkins, Sir Paul


Brotherton, Michael
Hawksley, Warren


Brown, Michael(Brigg &amp; Sc'n)
Hayhoe, Barney


Bruce-Gardyne, John
Heddle, John


Bryan, Sir Paul
Henderson, Barry


Buchanan-Smith, Rt. Hon. A.
Higgins, Rt Hon Terence L.


Buck, Antony
Hogg, Hon Douglas (Gr'th'm)


Budgen, Nick
Holland, Philip (Carlton)


Burden, Sir Frederick
Hooson, Tom


Butcher, John
Hordern, Peter


Carlisle, John (Luton West)
Howell, Rt Hon D. (G'ldfd)


Carlisle, Kenneth (Lincoln)
Howell, Ralph (N Norfolk)


Carlisle, Rt Hon M. (R'c'n)
Hunt, David (Wirral)


Chalker, Mrs. Lynda
Hunt, John (Ravensbourne)


Channon, Rt. Hon. Paul
Hurd, Rt Hon Douglas


Chapman, Sydney
Irvine, RtHon Bryant Godman


Churchill, W. S.
Irving, Charles (Cheltenham)


Clark, Hon A. (Plym'th, S'n)
Jenkin, Rt Hon Patrick


Clark, Sir W. (Croydon S)
Jopling, Rt Hon Michael


Clarke, Kenneth (Rushcliffe)
Joseph, Rt Hon Sir Keith


Clegg, Sir Walter
Kaberry, Sir Donald


Cockeram, Eric
Kellett-Bowman, Mrs Elaine


Colvin, Michael
Kershaw, Sir Anthony


Cope, John
Kimball, Sir Marcus


Cormack, Patrick
King, Rt Hon Tom


Corrie, John
Kitson, Sir Timothy


Costain, Sir Albert
Knight, Mrs Jill


Cranborne, Viscount
Knox, David


Critchley, Julian
Langford-Holt, Sir John


Crouch, David
Latham, Michael


Dickens, Geoffrey
Lawrence, Ivan


Dorrell, Stephen
Lawson, Rt Hon Nigel


Douglas-Hamilton, Lord J.
Lee, John


Dover, Denshore
Le Marchant, Spencer


Dunn, Robert (Dartford)
Lennox-Boyd, Hon Mark


Durant, Tony
Lester, Jim (Beeston)


Dykes, Hugh
Lewis, Sir Kenneth (Rutland)


Eden, Rt Hon Sir John
Lloyd, Ian (Havant &amp; W'loo)


Edwards, Rt Hon N. (P'broke)
Lloyd, Peter (Fareham)


Eggar, Tim
Loveridge, John


Emery, Sir Peter
Luce, Richard


Eyre, Reginald
Lyell, Nicholas


Fairbairn, Nicholas
McCrindle, Robert


Fairgrieve, Sir Russell
Macfarlane, Neil


Faith, Mrs Sheila
MacGregor, John


Farr, John
MacKay, John (Argyll)


Finsberg, Geoffrey
Macmillan, Rt Hon M.


Fisher, Sir Nigel
McNair-Wilson, M. (N'bury)


Fletcher, A. (Ed'nb'gh N)
McNair-Wilson, P. (New F'st)


Fletcher-Cooke, Sir Charles
McQuarrie, Albert


Fookes, Miss Janet
Major, John


Forman, Nigel
Marland, Paul


Fowler, Rt Hon Norman
Marten, Rt Hon Neil


Fraser, Rt Hon Sir Hugh
Mates, Michael


Fraser, Peter (South Angus)
Mather, Carol


Fry, Peter
Maude, Rt Hon Sir Angus


Gardiner, George (Reigate)
Mawby, Ray


Gardner, Sir Edward
Maxwell-Hyslop, Robin


Garel-Jones, Tristan
Mayhew, Patrick


Gilmour, Rt Hon Sir Ian
Mel lor, David


Glyn, Dr Alan
Meyer, Sir Anthony


Goodhart, Sir Philip
Miller, Hal (B'grove)


Goodlad, Alastair
Mills, Iain (Meriden)


Gorst, John
Mills, Sir Peter (West Devon)


Gow, Ian
Miscampbell, Norman


Gower, Sir Raymond
Moate, Roger


Gray, Rt Hon Hamish
Monro, Sir Hector


Greenway, Harry
Montgomery, Fergus


Griffiths, E.(B'y St. Edm'ds)
Moore, John


Griffiths, Peter (Portsm'th N)
Morgan, Geraint


Grist, Ian
Morris, M. (N'hampton S)


Grylls, Michael
Morrison, Hon C. (Devizes)


Gummer, John Selwyn
Morrison, Hon P. (Chester)


Hamilton, Hon A.
Mudd, David


Hamilton, Michael (Salisbury)
Murphy, Christopher


Hampson, Dr Keith
Myles, David






Neale, Gerrard
Speller, Tony


Needham, Richard
Spence, John


Nelson, Anthony
Spicer, Jim (West Dorset)


Neubert, Michael
Sproat, Iain


Newton, Tony
Squire, Robin


Normanton, Tom
Stainton, Keith


Nott, Rt Hon Sir John
Stanbrook, Ivor


Onslow, Cranley
Stanley, John


Oppenheim, Rt Hon Mrs S.
Steen, Anthony


Page, John (Harrow, West)
Stevens, Martin


Page, Richard (SW Herts)
Stewart, A.(E Renfrewshire)


Parris, Matthew
Stewart, Ian (Hitchin)


Patten, Christopher (Bath)
Stradling Thomas, J.


Pattie, Geoffrey
Tapsell, Peter


Pawsey, James
Taylor, Teddy (S'end E)


Percival, Sir Ian
Tebbit, Rt Hon Norman


Pink, R. Bonner
Temple-Morris, Peter


Pollock, Alexander
Thomas, Rt Hon Peter


Porter, Barry
Thompson, Donald


Prentice, Rt Hon Reg
Thorne, Neil (Ilford South)


Price, Sir David (Eastleigh)
Thornton, Malcolm


Proctor, K. Harvey
Townend, John (Bridlington)


Raison, Rt Hon Timothy
Townsend, Cyril D, (B'heath)


Rathbone, Tim
Viggers, Peter


Rees, Peter (Dover and Deal)
Waddington, David


Rees-Davies, W. R.
Waldegrave, Hon William


Renton, Tim
Walker, Rt Hon P.(Wcester)


Rhodes James, Robert
Walker, B. (Perth)


Rhys Williams, Sir Brandon
Walker-Smith, Rt Hon Sir D.


Ridley, Hon Nicholas
Wall, Sir Patrick


Ridsdale, Sir Julian
Waller, Gary


Rifkind, Malcolm
Walters, Dennis


Rippon, Rt Hon Geoffrey
Ward, John


Roberts, Wyn (Conway)
Warren, Kenneth


Rossi, Hugh
Watson, John


Rost, Peter
Wells, Bowen


Royle, Sir Anthony
Wells, John (Maidstone)


Rumbold, Mrs A, C. R.
Wheeler, John


Sainsbury, Hon Timothy
Whitney, Raymond


St. John-Stevas, Rt Hon N.
Wickenden, Keith


Scott, Nicholas
Wiggin, Jerry


Shaw, Giles (Pudsey)
Williams, D.(Montgomery)


Shaw, Sir Michael (Scarf)
Winterton, Nicholas


Shelton, William (Streatham)
Wolfson, Mark


Shepherd, Colin (Hereford)
Young, Sir George (Acton)


Shepherd, Richard
Younger, Rt Hon George


Silvester, Fred



Sims, Roger
Tellers for the Noes:


Skeet, T. H. H.
Mr. Robert Boscawen and


Smith, Tim (Beaconsfield)
Mr. Ian Lang.

Question accordingly negatived.

Coal Industry

The Under-Secretary of State for Energy (Mr. John Moore): I beg to move,
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1983, which was laid before this House on 10th March, be approved.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take motion No. 3:
That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1983, which was laid before this House on 10th March, be approved.

Mr. Moore: I am sure that most of the hon. Members present tonight will know that two orders of this type are needed in March each year: the Redundant Mineworkers (Payments Scheme) Order to introduce an updated table of benefits paid by the Government under the redundant mineworkers' payments scheme to persons redundant in the coal industry on or after 6 April and eligible for the scheme, taking account of changes in unemployment benefit and any other amendments to the social security system; and the pension scheme order, to adjust the Government's reimbursement of deficiency contributions to the mineworkers' pension scheme to take account of cost of living increases in pensions. This is the fourth time I have moved approval of these two orders, and I think I can reasonably say that I am now nearly as old a hand at it as the hon. Member for Midlothian (Mr. Eadie).
Some of the RMPS orders that I have introduced have confined themselves to updating the benefits in this way, and perhaps making minor changes to eliminate any anomalies or difficulties in the operation of the scheme. By contrast, the order I introduced two years ago made substantial improvements to the benefits available under the scheme, for the first time since 1973. There were substantial increases in the lump sum payments, and these were extended for the first time to persons aged 55 to 59 at redundancy. The duration of weekly benefit payable to people aged 55 or over at redundancy at about two-thirds of previous earnings was extended from three years to five years. At the same time, the benefits paid by the industry's pensions schemes to such people once their benefit at two-thirds earnings had expired were increased, and immediate pensions were provided for all people aged 50 to 54 at redundancy. The Government reimburse the pensions funds, through the board, for the cost of doing this; this has required a small extension of existing statutory powers, which, as the House knows, we took under the Coal Industry Act 1982.
The present RMPS order comes somewhere between the two. It makes some useful improvements to the benefits, and also tidies up several anomalies and difficulties, but it does not represent by any means such a substantial improvement as was made in 1981.
The age group in which improvements are concentrated is that of persons aged 50 to 54 at redundancy. Under the present scheme, these people receive lump sum payments, but no continuing benefit—although, as I have mentioned, they do receive a pension from their industry scheme which might, in typical cases, amount to about £25 per week. Those redundant on or after 6 April will continue to receive all these benefits and, in addition, two continuing scheme benefits.
First, once their entitlement to unemployment benefit has expired—normally a year after redundancy—as long


as they remain unemployed, the scheme will pay a continuing benefit equal to the rate of unemployment benefit they would be receiving but for the expiry of their entitlement—currently £40·45 per week for a married couple without dependants. Secondly, the scheme will pay a supplement, making their pension up to £35 per week. Thus, under the new scheme and the pensions schemes most persons redundant at ages 50 to 54 will receive total benefits of around £75 per week. In addition, they will now receive concessionary coal on the same basis as do those aged 55 or over at redundancy.
There are some improvements also for those aged 55 or over at redundancy. The limit on earnings used in working out their weekly benefit at about two-thirds of earnings is to be raised from £140 to £160 per week, and a minor change is made to the procedure for calculating these earnings to bring the RMPS into line with the board's own voluntary early retirement scheme. Once the five-year period of earnings-related benefit has expired, these people already receive pensions, as I have pointed out, and also unemployment benefit equivalent payments if they have not reached the normal retiring age. They will now receive the same supplementary payment with their pension, taking it to £35, as will the 50 to 54 age group.
People made redundant below the age of 50 will continue to receive lump sums only, on a progressive scale related to age, service in the industry, and final earnings. The maximum level of payments per year of service is not increased, but the rate of progression through the scale is increased so that this maximum is reached at age 40 instead of age 47.
In addition to these changes, there are several which rectify anomalies and difficulties in the scheme for those redundant on or after 6 April. I am very pleased to see the hon. Member for Pontefract and Castleford (Mr. Lofthouse) in the Chamber tonight. He has raised with both my right hon. Friend the Secretary of State for Employment and myself the fact that individuals whose service in the industry is broken for more than 26 weeks through injury can suffer a large reduction in those lump sum payments under the scheme which relate to payments under the Employment Protection (Consolidation) Act, with its use of continuous service in assessing payments. The National Union of Mineworkers has also raised the matter with us. This order stipulates that periods in which a man is receiving an incapacity pension do not break the continuity of employment for the purpose of the scheme.
By making this change we are rectifying an anomaly which has threatened to affect the benefits of a few people who have suffered injury during their employment in the industry. I am delighted to be able to do this, and I commend hon. Members on the pressure that they have applied on behalf of their constituents in the industry.
Difficulties have also arisen in respect of people who emigrate; their entitlement to benefit has in the past depended on the provisions of reciprocal treaties between their country of destination and the United Kingdom. Under this order, the Government will be able to pay benefit under slightly wider criteria.
All this is to be done by introducing new schemes, the 1983 schemes, for persons redundant on or after 6 April. These schemes are set out in the schedule to this order. People already redundant continue on the existing schemes, and there are a few minor improvements in their

benefits. However, many of these people will benefit from the fact that in his Budget statement on 15 March my right hon. and learned Friend the Chancellor of the Exchequer announced changes in procedures that will effectively mean that persons aged 59 or over on 5 April who have exhausted their entitlement to unemployment benefit will no longer have to sign on at a benefit office every three months in order to remain eligible for RMPS benefits. I know that that will be welcomed. As I have said, all these changes add up to a useful package of improvements to the RMPS. But they are not comparable in scope to those which we introduced two years ago. Nor do they represent any dramatic change in policies for the industry.
Many of the hon. Members present today will recall Mr. Siddall's speech to the Coal Industry Society just over a fortnight ago. He referred then to the burden that worn-out capacity placed on the industry—a burden that could threaten the enormous progress that has been made under this Administration and their predecessor towards creating an effective and viable coal industry that can play an increasing role in the United Kingdom energy sector. He stated that the board's intention was to tackle this burden with determination, but also with compassion for the people involved, many of whom have given a lifetime of service to the industry and cannot be held in any way responsible for the difficulties at their pits. He pointed out that during the last few years the board had been very successful at finding other jobs in the industry for those who wished to stay, and that the board intended to go on doing so as long as possible. The improvements in the 1983 scheme are intended to facilitate this, but decisions about individual pits and the men employed at them will, of course, continue to be made by the board in consultation with the men involved and their trade unions.

Mr. Dennis Skinner: The Minister referred to tidying up some anomalies, and to one anomaly in particular. He mentioned my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) in that respect. Does he recall that not only during the lifetime of the present Government but under previous Governments we have raised the anomaly—it is a large anomaly, but is shrinking—of those persons, some of whom had more than 40 years in the industry, who were part of the pit closure programme before 1965 and who do not have concessionary coal because they did not fit into the local pool scheme which was arranged at that time? There are many such people in the southern end of my constituency and in other constituencies. Will the Minister consider this anomaly and try to provide concessionary coal for those who, because of their lack of entitlement under the local pool scheme, did not receive concessionary coal? Although they are reducing in number and are becoming very old, they should be receiving that coal.

Mr. Moore: I know of the point that the hon. Member has legitimately raised. He fairly pointed out that Governments of both persuasions have considered it with sympathy but with little else. I shall consider it again, although I cannot give any commitment. It is obviously not included in the present order. It involves the pre-1968 people and, as the hon. Gentleman rightly said, the group is becoming smaller. I shall consider those points with care.
I now turn briefly to the second order, which follows the standard form of earlier years. The Government have


continued the policies established by their predecessor through the National Coal Board (Finance) Act 1976, whereby the cost of meeting the deficiency in the mineworkers' pension scheme fund resulting from the need to pay pensions to the large numbers of people who left the industry before 6 April 1975 is being reimbursed through Government grants over the period to 1995.
Each year the level of pensions is increased, resulting in a higher level of deficiency contributions; the Government may reimburse these up to the level necessary to maintain the real value of pensions if they are satisfied that the National Coal Board's finances do not permit of its taking on the additional burden itself. In a statement which my right hon. Friend the Secretary of State has laid before the House, he gives the reasons why he is satisfied on this count. He points out also that this year the increase in pensions has taken them a little ahead of the change in the retail price index since June 1974, which is, I understand, the established basis for comparison. For this reason, the statute does not permit the full cost of the current increase to be reimbursed by the board, though we are reimbursing as much as we can under the statute.
Both orders represent a continuation and development of the policies on the coal industry which have applied for some time. I seek the agreement of the House to both orders.

Mr. Alex Eadie: The Opposition do not quarrel with the orders that the Minister has introduced. I am conscious of the late hour, but it is unfortunate that we are restricted from dealing more generally with the affairs of the mining industry. That does not mean that some of the proposed changes are not important. Of course they are, and I shall deal with them in a moment.
Some of the difficulties of the mining industry have been highlighted by commentators in a bigoted, prejudiced and almost jaundiced way. That attitude reveals to Opposition Members an appalling ignorance of the industry and the part that it must play in ensuring that this country has adequate energy.
The orders make some extra provisions for redundant miners. Why not? Parliament has a duty to provide for miners who will lose their jobs or who are retired because of age. I do not consider that the improvements are overgenerous. The miners have served the industry and the nation well. Although the orders contain concessions, miners will see themselves in early unemployment rather than early retirement before they have exhausted their expectancy of gainful employment.
Make no mistake about it, miners are proud and believe that there is dignity in toil. They are a credit to any work force. The Minister has announced some concessions, but not all Ministers in the Government's lifetime have come to the Dispatch Box to announce concessions. It will be seen by many miners, and I am afraid portrayed in the media, as the Government paving the way for a further contraction of the coal industry. Some will put it more bluntly as selling jobs in the coal industry.
The Minister can properly point out that the orders provide for the spending of several million pounds. That is not the only money that we see associated with mining. We are told that another £1 million, £1·5 million or £1·75 million is to be spent in inveigling Mr. MacGregor to become chairman of the National Coal Board. I and some of my hon. Friends have spent a great part of our lives

working or associated with the coal industry. We have an emotional involvement with the industry and the men who work in it. I have never apologised for that and nor have my hon. Friends. It has been said before that only those associated with the industry understand that coal dust is embedded in their whole being. With all the experience that I have described, I have never known anything more bizarre or ridiculous than the saga of the impending appointment of Mr. MacGregor. This great industry deserves better. Mr. MacGregor is not acceptable to the broad band of opinion in the coal industry.
The concessions outlined in the orders, to which the Minister properly referred, are not unacceptable to the Opposition. We must weigh the whole of the redundant mineworkers' scheme against what has been happening in the industry. I take as my starting point the period 1974–75 to 1982–83. Since then 63 pits have closed. The men affected total 22,886. Of that total 5,793 became redundant and 15,299 were transferred. In addition to the men made redundant as a result of pit closure since 1973–74, 42,739 other men have accepted redundancy terms. It must also be borne in mind that a substantial number of those redundancies were made on a "one for one" basis, to accommodate men transferred. But of that total of 48,532 men accepting redundancy terms 90 per cent. were over 55.
I refer to those figures for one purpose alone. Some sections of the press have been screaming that the miners must accept pit closures and redundancy, as if a great light of awakening and wisdom had struck them and as if they had invented a new solution, whereas the reality is that pit closures and redundancies have been with us for some time and in the main have been accepted by the industry. What the men and the unions are not prepared to accept is the wholesale butchery of the coal industry, with all the social consequences that would flow from that, not just for the men but for the nation.
I shall look at some of the detail of the orders. We endorse the amended proposals dealing with the redundant mineworkers's pension scheme for those aged 55 and over. I know that the unions have been pressing for changes. I know that the miners' parliamentary group has been pressing for changes. The current scheme may have had some attractions for those over 55, but there has been increasing evidence that the men in that age bracket are concerned about the drop in income after the initial five-year benefit period has elapsed.
As we know, at present a married mineworker who has been made redundant under the terms of the redundant mineworkers' pension scheme receives about 90 per cent. of his pre-redundancy earnings for the first five years. Then, if he remains unemployed for the remaining time until he is 65, he receives from the mineworkers' pension scheme an amount equivalent to the rate of state unemployment benefit plus a pension from the scheme. The Minister referred to that. The reality of the present scheme is that that could mean a drop in weekly income of approximately £30 per week.
In the orders, for mineworkers aged 55 and over who are made redundant on and after 6 March 1983, a new redundant mineworkers' pension supplementary payment is proposed, which will make up the miners' pension scheme to £35 per week to alleviate the drop in income after five years' redundancy. That is to be welcomed, as is the Minister's proposal to increase from £140 to £160


the limit on pre-redundancy earnings which may be used to calculate the level of basic benefit for the first five years of redundancy.
The Opposition also welcome the proposal that applies to those aged between 50 and 54 who are made redundant. It means that those people will receive, in addition to benefits that already apply, payments that are equivalent to unemployment benefit for as long as they are unemployed once their entitlement to unemployment benefit has expired. The amounts paid will be abated by any pension received that is in excess of £35 a week. If a man's pension is less than that, the scheme will bring it up to £35 a week. A significant proposal that the Opposition welcome is that those men will also receive their concessionary coal.
We do not quarrel with improvements in the scheme for people aged between 21 and 49, which the Minister announced in some detail. The order provides for a limited enhancement of lump sums. Nevertheless, it would be a tragedy if miners in that age group were lost to the mining industry for all time.
The Minister also referred to the new provision under article 17(2) of the draft order, which will help men who have a break in their continuous service of more than 26 weeks because of injury or sickness. Weeks for which they qualified for an incapacity pension under either the mineworkers' pension scheme or the National Coal Board staff superannuation scheme during that break in service will no longer be regarded as a break in continuity of service for calculating the lump sum, which is equivalent to the Employment Protection (Consolidation) Act 1978 lump sum, which is payable from the redundant mineworkers' pension scheme to men aged between 50 and 59 on redundancy.
The Minister generously conceded that there has been considerable pressure from the NUM, other unions in the mining industry and my hon. Friends in the miners' parliamentary group. He was right to comment on the role of my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse), who was so diligent that he sent circulars to many of my hon. Friends about the case and the anomalies as he saw them. He can claim that his campaign has had a response from the Government. The Opposition welcome that, although we campaigned with him.
There is one significant change that the Minister referred to briefly. I am not criticising him, but we should give the issue due consideration although it may seem trivial to some people. It is the payment of benefit, at the same rate as if he stayed here, to someone who emigrates, subject to the provision of the regular declarations about other income. The Minister will agree that we may be talking about an aged widow or aged mineworker who wishes to join a son or daughter living abroad. To some extent, that gives the lie to the Government's claim that this is a nanny state and that the young do not wish to look after their older relatives. This is a good measure that deserves more prominence than it will be given, because it will give great pleasure, satisfaction and independence to older mineworkers or their widows who go abroad to join their children.
There is provision in the order for one anomaly that I wish had been dealt with more fully, involving the special hardship allowance. Perhaps the Minister will deal with

the matter in reply. Under article 6(2) of the present order and article 7(1) of the draft order, provision is made for the reduction of the basic redundant mineworkers' pension scheme benefit by the amount of special hardship benefit awarded after the last day worked in respect of an industrial accident sustained, or an industrial disease developed, before the date of redundancy. This part of the scheme, more than any other, causes considerable anxiety to miners, because it results in the recovery of overpayments to them by offsetting their entitlement to a lump sum under the mineworkers' pension scheme.
The redundant mineworkers' pension scheme benefit is based on P60 earnings in the last complete tax year preceding the date of redundancy. Therefore, a mineworker who has an accident or who develops a disease during that year will suffer a reduction in his earnings and will fall within one of two categories. First, if special hardship allowance is awarded before the last day worked, it is not offset. That is quite right, because the miner's P60 earnings would have affected his redundant mineworkers' payment scheme benefit. However, if special hardship allowance is awarded after the last day worked, it is offset. I suggest to the Minister that that is illogical because the accident or disease would have reduced his P60 earnings and thus offset his redundant mineworkers' scheme benefit entitlement. This anomaly is also reflected in the mineworkers' voluntary early retirement scheme because it is based on the redundant mineworkers' payment scheme structure.
Another question that I must ask the Minister was mentioned briefly by my hon. Friend the Member for Bolsover (Mr. Skinner), but we must get it on the record. The Minister mentioned the number of occasions on which he has dealt with such orders. I have been dealing with them for at least 10 years, and I always ask this question because, although the entire populace may not read about this order, I assure the hon. Gentleman that the miners will read about it. It is necessary to get certain things on the record so that they can understand and comprehend any changes that we are proposing to make this evening.
The question that has to be asked for the purposes of the record is whether, when the submission for the 1983 mineworkers' pension scheme says that it will come into operation on March 23 1983, and proposes some changes, there is any element of retrospection in these orders. The Under-Secretary may claim that he has already answered this point in reply to my hon. Friend the Member for Bolsover. It was a very generous answer. Although he gave no commitment, he said that he would be prepared to look at the matter. I rest my case on that, but, for the purposes of the record, the question must be answered because we know from experience that when the terms of the order are made known questions and inquiries will be made by the miners.
The same question must also be asked about the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1983. As has been said, the order comes into operation on 6 April. I can see that questions will be asked about that, and the question that must be answered is, again, whether there is any element of retrospection in the order. As some of my hon. Friends will bear out, every year we get questions in our post about concessionary coal and entitlements. Therefore, I hope, for the purpose of the record, that the Minister will make some comment about any aspect of retrospection.
It is not our intention to divide the House. It would be churlish of us if we did not state that the orders give improved concessions, and we endorse that.

Mr. Geoffrey Lofthouse: I am grateful both to the Under-Secretary of State for Energy and my hon. Friend the Member for Midlothian (Mr. Eadie) for the kind remarks that they have made about me this evening. I am grateful also for some of the new provisions in the draft orders.
However, before I come to them, I associate myself with the speech of my hon. Friend because it seems that this could be a concession that redundant miners will find more acceptable, certainly the younger ones, and one that could smooth the path for Mr. Ian MacGregor if he eventually finishes up on the board with his big axe. The provisions of the orders may be the first cushion to enable him to do so. I remind the Government that cushions have two functions. They can comfort, and they can smother. I hope that we shall not see too much of the mining industry smothered.
I shall be brief because I know that other hon. Members want to speak. Mineworkers who unfortunately suffer such severe injuries that they cannot start work again within 26 weeks have to be taken off the colliery books for administrative purposes, in accordance with an agreement between the National Union of Mineworkers and the National Coal Board. When such people have been offered redundancy, the calculation of continued service has been from the day they restarted work after injury. In anybody's language that was an injustice. I am delighted that the new provisions will put an end to that. Miners will welcome the change.
It would be less than kind of me not to say that I appreciate the efforts and the understanding of the Minister during the past 16 months, and the kind ear and understanding I have received from both the Secretary of State for Energy and the Secretary of State for Employment. It is not often that such a view can be expressed in the Chamber.
I am sad that I have not had the same understanding and sympathy, in many ways uncharacteristically, from the National Coal Board. The Secretaries of State to whom I have referred cleared the matter many months ago and made it clear that the National Coal Board should not have tried to hide behind the shield of the Employment Protection (Consolidation) Act 1978. It could have paid these unfortunate men if it had so wished. After I got this assurance from the Secretary of State, I talked to the board. I got the most stupid, unsympathetic letter from a chap who has recently left the service of the board—on much better terms, I assume, than miners get.
The Minister shook his head when retrospection was mentioned. I draw it to his attention and to the attention of the House that probably no more than a dozen or 15 men would have been affected before the operative date of the order. There are two in my constituency. If it is accepted that there is an injustice now, it must have been an injustice for the others. The board should consider making ex gratia payments to the men who will not be covered when the order becomes operative.
I appreciate that when orders are drafted—the same is true of all laws, regulations or rules—it is impossible to cover every eventuality. My attention has been drawn to the case of people who have worked for the National Coal

Board ever since they came out of the armed forces after the war. There may be half a dozen such people; no more. I have here the contract of employment of one of my constituents. He signed on for the NCB at its brickworks at my old colliery at Ackton Hall at Featherstone on 2 May 1949, directly after he came out of the Army. In June 1973, he received a letter from the Midland Brick Company Limited, informing him that the company was taking over the NCB activities and that he could continue in employment if he wished.
The letter said:
To accept this offer, all you need to do is to carry on working after 15th June, 1973 in the normal way. If you are away from work on that date you can accept the offer by reporting to your Works Manager at the earliest convenient time. In either event you will become an employee of the Midland Brick Company Limited instead of the Board, but your service with the Board and Midland Brick Company Limited will count together as continuous service, and you will continue to be a member of your present N.C.B. pension or superannuation scheme".
My constituent did not want to work for the Midland Brick Company. He had always worked for the National Coal Board. So he applied to continue as one of its employees. On 19 June, he was accepted by the board at Kellingley colliery, and he has worked there ever since. Now he is told, in a letter from the NCB Yorkshire area:
With reference to your memorandum of the 24th May 1982 and Mrs. Shaw's subsequent telephone conversation. I confirm that service at Brickworks cannot be counted towards the qualifying service in respect of the Redundant Mineworkers Payments Scheme".
If he had left the coal board's services in 1973 and worked for the Midland Brick Company he would have qualified for all his pension, and so on.
I bet that there are not more than half a dozen people who are in that position. I ask the Minister to consider the case of these unfortunate people such as my constituent, who since 1949 has had continuous employment with the NCB and who is now told that he qualifies for redundancy payments only from the time he joined Kellingley colliery in 1973. I hope that the Minister will give careful thought to the matter. I am grateful for the understanding that has been shown, and I am sure that redundant injured mineworkers who have suffered this injustice will also be grateful.

Sir Anthony Meyer: I shall be brief. I do not wish to keep out of the debate any Opposition Members who wish to speak. It is, however, right that there should be at least one Back Bench speech from the Government side. I have the honour to have a coal mine in my constituency. I do not suppose that a single miner there votes for me but there is no group of constitutents that I am more proud to represent. I wish to pay tribute to my hon. Friend the Minister, who has succeeded in gaining the confidence of both sides of the House in his commitment to the industry.
Any debate on the coal industry produces many phrases about the dignity of labour. Those phrases are amply justified in the case of the coal industry. It is not a mere empty ritual. The pit in my constituency is among those that stand to benefit from a policy of concentrating investment on successful producers. It is a successful pit with a bright future. I shall always be found arguing on the side of those who say that we should concentrate on backing success. I recognise, however, the tragedy that is involved in talking glibly about natural exhaustion and


closing down uneconomic pits. When a pit is closed, it is a tragedy for those who work in it. It also means the death of a whole community. We should beware of accepting too easily the jargon of economists who suggest moving on to wherever happens to be successful.
It looks pretty clear that Mr. Ian MacGregor is to be the new chairman of the National Coal Board. I have to confess that if I had been responsible for making the appointment, he would not have been my choice. That is rather typical of me. It is, however, perhaps typical of my right hon. Friend the Prime Minister to meet all difficulties head on. I can understand that Opposition Members, when Mr. MacGregor is appointed, will wish—

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The debate is not concerned with this matter.

Sir Anthony Meyer: It has been raised, Mr. Deputy Speaker, and there are only about three sentences that I wish to utter. I am replying to points that have been made from the Opposition Benches. I hope that Opposition Members will recognise the success that Mr. MacGregor has achieved in the steel industry in restoring to that industry a pride in its achievements. It would be a great mistake if they were to fall into the trap set for them by Mr. Arthur Scargill and allow themselves to be driven into a dead-end of opposition to everything that Mr. MacGregor is trying to achieve. There is need for a successful coal industry if the schemes under discussion are to be financed in perpetuity. Otherwise, the Treasury will be asking, sooner or later, why large sums of public money are being poured into an industry that loses money for the nation.
It is essential that the coal industry, in the long run, should pay its way. So long as my hon. Friend the Minister remains in his post, we can be reasonably sure that the pace of change will always be tempered by the needs of the industry and those who work in it. I hope that the Opposition will not allow themselves to be trapped into an attitude of destructive opposition.

Mr. Dennis Skinner: I do not wish to rehearse the arguments already made about those who were left out of the coal schemes before redundancy payments were initiated. I am relatively pleased with the Minister's speech but I hope that he will be more forthcoming when he replies. We should stand a fair chance of seeing included in the scheme the special hardship cases mentioned by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse). I take into account the fact that Mr. MacGregor is to receive his special hardship payment for loss of earnings. Mr. MacGregor is to receive his loss of earnings from the Government. If he can receive £1·75 million loss of earnings on top of the other loss of earnings that finds its way back to Lazard Freres, my hon. Friend's suggestion of special hardship rings true. It should be pursued.
The problem about the redundancy payments is that we have to nod through the orders tonight against a background of a great feeling of mistrust and ill will towards the Government and their attitude in recent years in general terms.
The orders should not be considered only in the light of what miners aged between 50 and 65 will receive. The

Government have a duty to expand the economy and to increase the use of coal. They should curb oil and coal imports and, where possible, expand exports. Less money will then need to be spent on redundancy payments. The coal industry is declining while the House continues to discuss anomalies such as have been referred to tonight and the general sweep of redundancy payments. There must be a real attempt to establish more markets for coal to get rid of some of the 50 million tonnes. The miners can play their part in doing that. We should not then need to spend so much on redundancy payments.
That is the message that should reach all miners who read reports of the debate and examine the orders. They want to see a growing and thriving coal industry in south Wales, Yorkshire, Derbyshire and elsewhere in the United Kingdom. They are looking not for redundancy payments but for work. That is the message that we should spell out tonight.

Mr. Tom Ellis: I welcome the orders unreservedly. I stress that because I was perplexed by the speech of the hon. Member for Midlothian (Mr. Eadie). He seemed to imply that there was some kind of a conspiracy to facilitate the closure of pits when Mr. MacGregor took over. I hope that I have misunderstood him, but that seemed to be the implication. His logic was a little at fault. Supporting the hon. Member for Bolsover (Mr. Skinner), he mentioned the position of those who retired before the pooling arrangements. I echo the plea that something should be done for such people. I am sure that they would have been pleased if the present scheme had been in operation in their day. It cannot be regarded as some design for Mr. MacGregor; far from it.
I welcome not only the orders but the fact that each successive order has, even if only marginally, improved in one or two particulars. The Minister has spelt out several improvements, especially the fact that 26 weeks' incapacity will not be regarded as a break in service. Such matters are welcome.
Two particular improvements might be made in the future. First, we should look at the principle rather than improving marginal arrangements. We should consider whether it might not be a good thing to base payments on individuals rather than jobs.
Article 3(a) says that an employee shall not be eligible for weekly payments under the scheme unless
he is a redundant person and … became a redundant person by reason of the cessation or reduction of the services or facilities at that place".
It might be a step forward if those arrangements were designed to make it easy for an employee willingly to accept change rather than simply to ease a change that is sometimes gratuitously forced upon somebody. That is what happens in practice. It might appear a little pedantic to want it written into the legislation, but I put it forward as a suggestion.
The Government give payments to the board for concessionary coal. In some cases, half the cost is paid by the Government and in a few cases the full cost. The cost of concessionary coal to the board is substantial, and is a social cost that the industry should not be obliged to bear.
To illustrate the scale of the cost, I shall cite the experience of a small coalfield which was in my constituency. There were six collieries in the coalfield, but today there is one. As successive collieries closed, the


concessionaires drew their coal from the remaining collieries. As only one colliery is now producing coal for concessionaires who were made redundant at the other five collieries, it means that the colliery, which at one time employed about 700 people and had 2,000 retired or redundant concessionaires on its books, is obliged to work for two days a week simply to provide concessionary coal. The Government should pay that cost in its entirety. It is unfair that that substantial cost should fall on the industry. I trust that in a future order the half payment support from the Government will become full support.

Mr. Alec Woodall: I echo the remarks made by my hon. Friends the Members for Bolsover (Mr. Skinner) and for Pontefract and Castleford (Mr. Lofthouse) in paying a fulsome tribute to the Under-Secretary of State for his part in introducing this order. However, it has its anomalies.
I am obliged to bring to the notice of the House and that of the Under-Secretary of State the case of Mr. Raymond Earp who resides at 117 Inksfield lane, Bolton upon Dearne, and who is one of my constituents. Raymond is nearly 60 years of age. He left school at the age of 15 and started work at Goldthorpe Highgate colliery as a boy. He has worked there virtually all his life. Unfortunately, seven or eight years ago Raymond was working at the coal face when he saw his buddy accidentally killed in a terrible accident. He was so upset that he vowed that he would never go down a mine again. He left the employment of the board to the great regret of his colliery manager, who said to him, "Raymond, if you ever want to come back to the pit, come and see me and there will be a job for you."
Raymond took a job with a gas works for three weeks. He missed the comradeship of his mates and, unfortunately, he had to travel a long distance, so he returned to see the colliery manager six weeks after the fatal accident. His colliery manager said, "Sign on and start work as soon as you like." Raymond signed on and has worked at that colliery all his working life with the exception of six weeks. When I saw him two months ago, he said, "Mr. Woodall, I'm knackered. I want to get out. What is the board going to offer me?" He said, "I know—peanuts." His redundancy payments are tied to the date of his re-engagement. For the sake of six paltry weeks, Raymond Earp will lose £7,000 to £8,000, which he cannot afford to do. Raymond Earp, more than anyone else, wants an amendment to the employment legislation. God in Heaven, I have done my best to explain to him that his case is exceptional.
My hon. Friend the Member for Pontefract and Castleford has mentioned the accident cases, which might involve six people like Raymond Earp in Yorkshire. Because Raymond saw the accident when his buddy was killed beside him and left for a short while, he is now excluded. The board, for all its words about being a perfect employer—as my hon. Friend the Member for Pontefract and Castleford has pointed out—is not as perfect as it might be.
I worked in the coal industry for 41 years before I became a Member of Parliament and the NCB always told me that a man could not do enough for a good firm. My reply to it is that a good firm cannot do enough for a good workman. It certainly has not done fair by Raymond Earp, but it is tied by the Act. Therefore, will the Minister please look at such cases, just as he has sympathetically

considered the cases taken up by my hon. Friend the Member for Pontefract and Castleford? I hope that the Minister will consider the case of Raymond Earp, because that man has given his life to the coal industry. He wants to finish work because the NCB has virtually had all the work out of him. He has told me that he is knackered and wants to finish work, but he will lose money.
Why cannot the Minister consider such cases? It is a simple case, and I hope that the Minister will understand.

Mr. Edwin Wainwright: Every hon. Member has rightly spoken about the men in the industry. Indeed, I welcome the improvements submitted by the Minister, because they are very important to the men in the coalfields. However, I hope that the hon. Gentleman will seek further improvements, because there are still quite a few anomalies, as my hon. Friends have pointed out.
For example, some widows' husbands worked in the pits until they were 60 and took some type of benefit. I do not think that it took the form of redundancy pay, but it was still a substantial sum. When their husbands died, some of the wives lost their concessionary coal or coal allowance. I should like the Minister to consider the case of those widows, because it is very important. They gave the whole of their lives to their husbands who worked in the pits. In the days that I knew, it was not easy. I remember my poor mother getting up, as was the custom, to get my father off to work at 4.30 am. Miners' wives did that. It was an awful practice, but it was accepted that the wives should do it, and they did it. They then got the children off to school. When I started work, my mother did that for my father and me. When my father gave up work, I got my younger brother off to work too, and if I was on the afternoon shift I got the younger children off to school. I did that to try to help my poor mother.
I have had a case on my files for four or five years and I shall send it to the Minister. The NUM has tried its best to obtain concessionary coal for this old lady, who is now 65 or perhaps 70, but who cannot get any own coal allowance. We tend to think too often about the male side of this great industry, because only males are employed in the getting and winning of coal. The poor widows are often forgotten. However, hundreds of widows do not receive the benefits that they should receive, because some unfortunate incident has occurred that deprives them., because of the agreement reached between the NCB and the NUM.
I do not blame the NUM, because the NCB is often too hard-hearted in granting concessions to help the widows of its old employees. Many of those employees, of course, were not old when they died. However, those husbands took some benefit and did not think about what would happen to their wives if they died first. From the records I saw when I was a branch secretary, I know that in the industry there are 10 times more widows than widowers and six times more widows than wives with retired husbands. I hope that the Minister will give special consideration to concessionary allowances for widows to ensure that we play fair with them and recognise the contribution they made to keeping their men folk working in this dangerous industry.

Mr. Michael McGuire: I shall take only a few minutes because I know that other colleagues wish to speak. I wish to reinforce the point that was made by my hon. Friend the Member for Bolsover (Mr. Skinner) and which has been graphically illustrated by my hon. Friend the Member for Dearne Valley (Mr. Wainwright). I, too, ask the Minister to look upon this as another exercise in a long series of welcome exercises in which we have improved the lot of people who, until Wilberforce, were left behind. Wilberforce opened the floodgates. It has been a flood of benefits because before that benefits were notoriously absent. We have found more and more anomalies as we have gone on. Both my hon. Friends are right in this respect. Hon. Members, especially those from mining areas, of whatever political persuasion find cases at their surgeries of husbands who worked a lifetime in the pit and were sometimes in receipt of a pneumoconiosis benefit, which was then taken away by the pneumoconiosis medical board because it diagnosed illness through natural causes. I have had to tell such people that, unfortunately, that is the end of the road.
A second category is widows whose husbands worked a lifetime in the pit but left before these schemes came into being. The widows therefore receive no concessionary coal. Most areas, including my area of north-west Lancashire, formed pooling schemes through the generosity of the miners themselves. The miners realised this heartfelt need. It was a feeling almost of deep sentimental attachment, a recognition that the widows should be given something.
The miners started a pension scheme for the old men who had worked all their lives in the pit before the introduction of the 1952 scheme. Most Members from mining areas will remember when miners received 10 shillings a week in old money—50p in modern money. The old men were blinded with tears by the fact that they were receiving 10 shillings a week that the miners were providing by paying 2d a week. The old men lost 10 shillings of what was called national assistance, but the pride in receiving that 10 shillings knew no bounds.
Special hardships have been mentioned tonight in probing question form by my hon. Friend the Member for Midlothian (Mr. Eadie). My hon. Friends the Members for Midlothian and Bolsover and other colleagues remember pushing Labour Ministers to do something on this issue. I remember the special hardship case of Neddy Holland, who died only a few months ago, who had worked for 52 years in the pits. He was a member of a committee of which I was the secretary. I am convinced that I obtained for him special hardship status not so much on the medical evidence but through pleading with the chairman of the panel and his colleagues that they had it in their gift to give him the special hardship payment of 37 shillings a week which would supplement his pension after 52 years in the pit. They did not believe what I said. Special hardship has always been dear to our hearts, and my hon. Friend the Member for Midlothian was right to draw attention to it.
We have now built a good platform of benefits. Miners are being rewarded. In many other countries they retire a good deal earlier and their benefits are secure. So we are not doing anything out of the way. We are not doing anything out of the ordinary, but we are doing it differently. I urge the Minister, who has been generous and who, we know, is receptive to our requests, to see

whether there is some way of giving the widows of men who spent many years in the pits some retrospective allowance. It would be to the credit of the Tory Government if they could give some tangible proof to those who are outside the present scheme that we recognise their late husbands' contributions. It would remove their feeling of being left out.
I had a case this week in which I tried to do my best. I hope that the coal board in my area—my colleagues will understand the phrase—will work a "flanker" on the basis that if there is any roguery let us be fair about it. I hope that the widow involved will receive something. Not all widows go to their Members of Parliament. Some take their anguish, hide it away and carry the cross. I hope that the Minister will give those widows some comfort tonight. I welcome the order.

Mr. Dennis Canavan: There will be a general welcome for any improvement in the miners' pension and redundancy scheme. Miners deserve every penny that they can get if they are made redundant.
I should like to reiterate the point made by my hon. Friend the Member for Bolsover (Mr. Skinner) about the need for more investment in the industry. Increased investment would avoid more unnecessary redundancies. I am afraid that there is a cloud hanging over the industry at present about the closures that are taking place and those that are threatened. It has been said that that is perhaps part of the reason why the scheme has been introduced.
I should like to give a couple of examples of the National Coal Board attempting to close pits that would affect my constituents, because I think that there are lessons that can be learnt.
The first case relates to Polmaise colliery in my constituency. The NCB proposed to close it about seven years ago. As soon as I heard about it I raised the matter in the House. That weekend there was a mass meeting in Fallin miners' welfare club. Mick McGahey, the president of the Scottish miners, the local NUM delegate John McCormack and I said "We are going to fight this closure." John McCormack asked whether there were any questions and one man asked, "How much redundancy money will we get?" John McCormack saved the day by falling on this person like a ton of bricks. He said in no uncertain terms "There will be no talk of any redundancies at Polmaise colliery. We want jobs, not redundancy money."
A tremendous cheer went up, which almost lifted the rafters of the miners' welfare club. I knew from that minute that the fight to save Polmaise colliery was winnable. We went on to win by a combination of parliamentary action and what has been described as extra-parliamentary action. We convinced the NCB that it should invest more money in the pit. That investment led to the present development.
The other example that I should like to give is that of Kinneil colliery in the constituency of my hon. Friend the Member for West Lothian (Mr. Dalyell). I have his permission to raise this matter because some of my constituents work there. When the NCB proposed the closure of the pit, the men of Kinneil mounted a heroic fight against the closure, involving a courageous sit-in down the pit over the Christmas period. Unfortunately the men did not get the support that they deserved from miners in other pits. It was proposed to close the pit despite


reserves of thousands of tonnes. Miners at other pits were persuaded not to oppose the closure because of a promise made by NCB spokesmen that all the men of Kinneil would be offered alternative employment and that there would be no compulsory redundancies.
Since then it has emerged that some of the tradesmen in the pit have not been offered other jobs in their trades. I accept that they have been offered other jobs in the industry. I wrote to Mr. Wheeler, the Scottish director of the NCB, about the case of Mr. Gerry Fullard, from Dunipace, but many others are similarly involved. I hope that the Minister will put some pressure on the NCB to ensure that these men—many of them are young—obtain alternative employment in the skills for which they have been trained. These are people who want jobs and not redundancy payments.
There is the possibility that this man MacGregor will be appointed chairman of the NCB. He is a renowned hatchet man. We know what he has done in the steel industry and if he gets his hands on the coal industry, heaven help us. If that happens, the redundancy scheme that we are debating will itself be redundant, or it will prove to be grossly inadequate. That will happen unless we make MacGregor redundant and ensure that we find a much better, more positive and more constructive person to lead the industry, who will ensure that there is a viable future for the coal industry instead of the cloud that is hanging over it now.

Mr. Frank Haynes: I ask for your guidance, Mr. Deputy Speaker. I want to be fair to the Minister, and I should like to know when he wishes to reply to the debate.

Mr. Deputy Speaker: That question would be best answered by the Minister.

Mr. John Moore: I must complete my remarks by 11.42 pm

Mr. Haynes: That leaves me only a short time. I wish to be fair to the Minister and allow him adequate time in which to reply.
It is clear that the Minister has been sincere, but sincere only within the remit of Government policy. When I go to bed I look at the ceiling, and I see a vision. The picture that slowly forms is one of further closures in the mining industry, and the proposals before us are part of the preparation for them. The parts of the picture fit together well, especially when I remember the remarks of Ministers, the chairman of the NCB and those of the National Union of Mineworkers and all the other unions that are involved in the industry. It is clear what is happening. The Minister will have to return to the Dispatch Box time after time to provide more and more money. I do not know where he will get it from—perhaps the Bank of England or the North sea—but he will have to get it to pay the many more who will come within the terms of the order.
There have been two recent pit closures in my constituency. The NCB claims that mineworkers can stay in the industry because there are jobs for them, but the workers who have been made redundant cannot be soaked up for ever. Some of the pits that have taken those who have been made redundant as a consequence of closures and who wanted to continue in the industry have

themselves become uneconomic. The men who have been transferred to two of the pits in my constituency have made them uneconomic, and they go on the closure list. The position will become worse. It is high time that the men who work in the industry realised what is going on.
That is the picture that I see. I am sure that I am right I hope that we can stop this Government doing what they want to do with the mining industry.
The Minister has a grin on his face, but the Government's nuclear energy programme will have a serious effect on the coal mining industry.
It would be unfair to many people who have worked in the industry, and to their widows, if they did not receive the concessionary coal to which they are entitled. There are variations in entitlement in each area. Some suffer, and others do not. The Government should consider the issue and table a different order, bearing in mind the pressures from hon. Members, particularly from my hon. Friend the Member for Bolsover (Mr. Skinner).

Mr. John Moore: I apologise if I cannot answer all the points raised by hon. Members, but I have only a limited time in which to reply to the debate. I shall write to hon. Members about issues that I cannot cover tonight. As the hon. Member for Midlothian (Mr. Eadie) said, they are important to the mining community. I wish that we could have more time to debate what those of us in the Chamber now regard as the most important issue.
I am delighted that the hon. Member for Midlothian has welcomed the orders. With the exception of what I hope is a late night dream by the hon. Member for Ashfield (Mr. Haynes), most hon. Members have seen in the orders an attempt by Governments of both parties to ameliorate the difficult conditions in an industry of constant change. That seems to have been the general view.
I have come across the few cases of emigration. They are more important than most people understand. I am delighted that we are able to make modest chalges.
The hon. Member for Midlothian and others referred to the special hardship allowance. The Government have examined it with the NUM. The allowance is a continuing state benefit paid to some persons who have suffered injury in the course of employment. If such a man were to be made redundant, his pre-redundancy earnings would be assessed as they were prior to injury, and if he received special hardship allowance on top of basic benefit, assessed on the basis of such earnings, he would be better off than a man who had never been injured. Clearly he should be no worse off, but to make him better off would cause considerable anomalies. That has been the position for many years.
One change that the order makes is that pre-redundancy earnings are now to be assessed on the basis of average earnings during the last tax year worked, not the earnings appropriate to the grade in which a man was employed at redundancy. This will benefit someone who is downgraded following injury.
The hon. Member for Midlothian asked important questions about retrospection. The topic is difficult. There is no basic retrospection. We do not wish to hinder people in the industry. There is no statutory retrospection, and the order will apply only to those made redundant after 6 April 1983. People made redundant in the coal industry are normally given three months' notice. Therefore, one could


say generally that anyone given notice of redundancy from the middle of January this year will benefit from the new terms.
The hon. Member for Pontefract and Castleford (Mr. Lofthouse) is trying to further his successful blandishments. I shall look at the point he raised. I am aware of the particular problems with regard to brickworks. The power to create the redundant mineworkers' pension scheme is limited by the Coal Industry Act 1977 to payments in respect of men made redundant by the closure of coal mines or through consequent reduction in ancillary services. Under present primary legislation, the scheme cannot be extended to cover any redundancy in any business, such as the brickworks in which the NCB used to be involved. I take the hon. Gentleman's point. I think he will know that changes in primary legislation would be required.
I said that I would look at the point made by the hon. Member for Bolsover (Mr. Skinner). I shall look at it with care. When concessionary coal for persons aged 55 or over at redundancy was introduced in 1973, a generous measure of retrospection was given back to 1969. I understand the point that the hon. Member and many others made. I shall personally look again at the issue.
My hon. Friend the Member for Flint, West (Sir A. Meyer) was extremely kind. I appreciate his remarks. I recall with pleasure the time when I visited the Point of Ayr colliery, when he was there. I cannot accept his underestimation of the support that he has in that area, certainly from the miners of that colliery.
The hon. Member for Hemsworth (Mr. Woodall) referred to Raymond Earp of Bolton upon Dearne and the

problem of the interruption of service. I think that we are trapped in the statutes here, but I shall examine the matter with considerable care, as I shall examine the points of the hon. Members for Dearne Valley (Mr. Wainwright) and for Ince (Mr. McGuire), both of whom referred to the problem of widows. I am conscious of that. I shall look at it. I cannot give a commitment, but I shall look at it with care to see what one can do.
I apologise to the hon. Member for Wrexham (Mr. Ellis) for not following the point that he was seeking to make. I shall look at it in Hansard to see whether I can understand it better.
The hon. Member for West Stirlingshire (Mr. Canavan) referred to Kinneil. I shall consider the point about the tradesmen. The board gave certain undertakings about jobs. I shall look at the matter with considerable care. However, at the end of the day, that must be a matter for the board in its relationship with its employees. The hon. Member for Ince referred to the problem of medical panels and pneumoconiosis. I have already answered a question by the hon. Member for Carmarthen (Dr. Thomas). There is a report in the Library. I have studied this—

It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).

Question agreed to.

Resolved,
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1983, which was laid before this House on 10th March, be approved.

Resolved,
That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1983, which was laid before this House on 10th March, be approved.—[Mr. John Moore.]

Steel Industry (North Lanarkshire)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]

Mr. Tom Clarke: I welcome the opportunity to discuss the serious problems of the decline of the steel industry in my county of Lanarkshire, particularly the problems in my constituency where redundancies have recently been announced at the Imperial plant in Airdrie and at the Calder works at Coatbridge. Redundancies are being discussed in R. B. Tennant as a result of the amalgamation with Sheffield Forgemasters. On top of all that in Lanarkshire—this applies to many of my constituents—there is speculation over the future of Ravenscraig and Gartcosh. I thought it right that the House should have the opportunity of a debate on those matters and that the Government should have the opportunity to reply.
In my constituency at the moment just under 11,000 people—this is after the new method of calculation—are officially registered as unemployed in the two jobcentres in Airdrie and Coatbridge. The redundancies that are being projected in Clydesdale in the constituency of my hon. Friend the Member for Bothwell (Mr. Hamilton) and in Imperial and Calder would add unreasonably and unacceptably to those numbers. British Steel has said that if the order books do not improve by 6 May, there will be 426 redundancies in Clydesdale, 185 in Imperial and 110 in Calder, giving a total of 721.
The three plants are interdependent—the future, efficiency and effectiveness of one of them will affect the other two. We cannot, therefore, talk about one in isolation. In terms of financial success and productivity, the three plants can talk of profits which would bring great credit to a private enterprise—they bring enormous credit to that sector of the British steel industry. Last year, the three plants made a joint profit of £21 million and they are on course for a profit of £15 million
In the Imperial at Airdrie, the investment, thanks to my right hon. Friend the Member for Chesterfield (Mr. Varley) when he was a member of the Labour Government, has been justified by the increase in productivity. If the redundancies occur, 185 men out of a work force of 460 will find that they no longer have jobs.
During the 1979 general election campaign—not long ago—450 men worked in the Calder works in Coatbridge. That work force has been reduced to 217 and, if these redundancies occur, it will be only 110. That means that, since the general election, the manpower there has been reduced by 75 per cent.
I have not yet heard a convincing argument or a reasonable case for the redundancies. In Calder last year, there was a projected loss of £1·25 million, but the works broke even. The men who achieved that are entitled to the thanks of our community—they know such gratitude exists—and to the congratulation of the House, not the question mark that hangs over the steel industry.
Coatbridge was known for many years as the "iron burgh". I regret to say that evidence of that role in industry is much and sadly in decline. The management of BSC whom I, my hon. Friend the Member for Bothwell and representatives of the unions met at the Clydesdale works on Friday, has not adequately explained the reasons for the

crisis that we now face and the announcement of possible redundancies. It was much less forthcoming than it ought to have been.
I was greatly disappointed when, on Monday, I presented myself as the Member of Parliament for Coatbridge and Airdrie for discussions with the management at the Calder works and it decided to postpone or abandon the entire exercise. I know that the Minister probably does not endorse that action, but we are getting dangerously far from any form of open government.
It would be right for the House to remind the BSC that Members of Parliament are elected and that their principal role is their guardianship of their constituents' interests. I hope that Mr. Ian MacGregor will not condone the decision of his management to treat the local Member of Parliament in that way.
Nor can I see the reasons for the doubts about the future of the jobs concerned. My colleagues in the trade union movement gave me information about the order books. The management were given a chance to do so but they did not take it. I am told that if we examined the order books for Calder, there are orders for 8,089 tonnes between now and September 1983. At Imperial the figure is 24,470, at Clydesdale 1 it is 5,171 and at Clydesdale 2 it is 10,091 tonnes.
All of this takes place a few days after the Budget, when the Chancellor said that some of his measures would aid oil exploration. That was noted in my constituency at the weekend, because The Scotsman reported a speech of the Secretary of State for Energy, who spoke about this factor with great optimism. The article stated:
In spite of the latest uncertainties on oil prices, Mr. Nigel Lawson, the Energy Secretary, was confident last night that the Government's Budget changes in oil taxation would give a boost to North Sea activity. He told the annual dinner of Knutsford Conservative Association that the moves could double the number of new oil and gas projects submitted for approval during the next two years.
The Secretary of State was reported as saying:
Indeed, despite the difficult conditions of today's oil market, I am hoping to see new oil and gas developments starting in that period at a rate of at least one every six weeks.
If that is the case, given the splendid record of Imperial, Calder and Clydesdale and the speculation about an upturn in this sector of industry, the onus is on the British Steel Corporation to give reasons for those redundancies. So far it has not taken the opportunity to do so. I cannot exaggerate the contribution that the work force of those plants has made to their survival and to increased productivity. Those men have not had a wage increase for three years, apart from the agreement on productivity, so there can be no argument that they are pricing themselves out of a job. They co-operated fully with the corporation's chairman's policy of "something for something"—a scheme that has led to greater productivity and to lower manning—and they have been given little thanks, if any, for their effort and contribution.
My hon. Friend the Member for Bothwell has written to the Department of Employment about the continuation of temporary employment subsidy payment. Will the Under-Secretary of State use his good offices to draw that to the attention of the Department, because there may be a case, given the uncertainty within the industry, for extending short-time working rather than declaring such brutal redundancies? That is surely better than reaching the


stage that I understand was reached some years ago when, during a similar crisis and hiatus in the industry, we imported tubes from Italy. We wish to avoid that.
On the cost of electricity, will the Under-Secretary of State confirm that there is an energy policy, that the corporation has not been disadvantaged and is not being asked to pay more than is reasonable, and that there is some co-operation between energy policies and the approach of the the Department of Industry? The Calder works has already provided tubes to Nigeria, and the customers were happy with the standards of production and delivery dates. However, because the International Monetary Fund is slow in reaching an agreement with Nigeria, there is a delay. I know that the Minister is interested in the Brandt report, as I am. This is one occasion when the recommendations of the Brandt report could lead to jobs in my constituency and in the entire country, and lead to improvements in that part of the Third world.
As to Ravenscraig and Gartcosh, inevitably, if the House is discussing the steel industry, and particularly this week, the subject of Ravenscraig must be raised. There was speculation in the Glasgow Herald yesterday that the Secretary of State for Scotland would meet Mr. MacGregor to discuss the £2 billion deal with an American steel company, we are told at the cost of 2,000 jobs at Ravenscraig and Gartcosh. We were also told by the paper that the executives are within a week of completing the details.
The Under-Secretary is, in my experience, a courteous man, and I ask him to pass on the view of the House, and particularly of Scottish Members, that it is time that the Secretary of State for Scotland clarified this issue. I invite him to remove as speedily as he can the speculation over the future of Ravenscraig. The things that are being said about the American deal and other matters do not equate with what the Secretary of State for Industry and the Secretary of State for Scotland said towards the end of last year and the beginning of this. It is time, and in the interests of the people and families in Lanarkshire who have given so much to the steel industry, for the future of Ravenscraig and Gartcosh to be clarified. It is time that the Secretary of State for Scotland made his position clear.
My concern about the steel industry and Ravenscraig and Gartcosh was expressed during my maiden speech on 14 July, and subsequently I wrote to the Prime Minister and said that my concern continued and that I still felt that the Government's opinions about these plants were rather vague. The Prime Minister said:
You express particular concern over the future of the major BSC works at Ravenscraig and Gartcosh. As you know, in recent months new productivity records have been set by the workforce at Ravenscraig. This is a very encouraging sign, which I was pleased to be able to refer to during my visit to Scotland at the beginning of September …
We must nevertheless keep up the pressure to reduce costs and improve competitiveness in the British steel industry. That is the way in which steel jobs can be secured, not by seeking assurance about the future of individual plants.
I endeavoured to do that, but I was joined after that debate by the Secretary of State for Scotland, the hon. Member for Edinburgh, South (Mr. Ancram) and almost every Tory Member of Parliament, who suddenly discovered that my predictions were becoming much more accurate than they had acknowledged during the debate.
The Prime Minister continued:
But no Minister can give categorical assurances about the long term future of any plant, whether in the steel industry or elsewhere. The absence of such a categorical assurance in the case of Ravenscraig and Gartcosh is therefore the normal state of affairs".
That may be the normal state of affairs for this Government, but it is an unacceptable state of affairs to the people of Lanarkshire and to the people of Scotland.
It is time that the Government came clean on the future of the Scottish steel industry and that the Secretary of State for Scotland was seen to defend the future of the Scottish steel industry, not least in my constituency of Coatbridge and Airdrie. I am delighted to have had the opportunity to put these points to the House and to the Under-Secretary.

The Under-Secretary of State for Industry (Mr. John Butcher): I congratulate the hon. Member for Coatbridge and Airdie (Mr. Clarke) on his tenacity in the interests of his constituents. It was not too long ago that he was leading a deputation of trade unionists from his constituency to discuss some of the problems at the Imperial plant. He has followed that up with the investigatory speech that he has made tonight. I congratulate him on having secured this Adjournment debate.
The House has devoted considerable attention to the difficulties of the steel industry in recent years. It is right that this should be so. The problems of steel raise important industrial, international and, not least, human issues which merit being kept under regular review. The hon. Member has rightly chosen this subject for debate tonight.
The House is only too well aware of the background to the domestic and international crisis in the steel industry. Steel forms the bedrock of modern industrialised economies. In the decades of industrial expansion after the last war, steel demand and production expanded as never before in response to continued and regular growth in manufacturing industry and trade throughout the western world. But, as we know all too well, the oil shock of the early 1970s, repeated towards the end of the decade, brought steady expansion to a halt. By then, however, steelmakers and Governments everywhere had laid the basis for major increases in production capacity for which markets failed to develop. It is this legacy with which the United Kingdom and virtually every other industrialised country now has to contend. The rationalisation and restructuring that it entails has painful and unwelcome consequences, but the problems have to be faced and will be made worse only if remedial action is constantly deferred.
I take the hon. Gentleman's point about the profitability of the plants in his constituency to which he has referred. When one talks of remedial action, obviously one hopes that management decisions made by the British Steel Corporation will take account of some of the factors that he has listed.
Before I turn to the position of the steel industry in north Lanarkshire, almost all of which is accounted for by the British Steel Corporation, I should like to say a few words about BSC's position more generally. At the end of the 1970s the corporation was burdened with excess capacity, a significant proportion of it obsolete, and a degree of over-manning, which together put BSC near the bottom of


the European league table in terms of efficiency and productivity. The struggle since then has been directed towards bringing capacity more closely into line with demand and slimming manpower so as to restore the corporation's competitiveness, reduce costs and thus enhance the prospects of job security for the work force that remains.
As I said earlier, the process has been painful; that is undeniable. Some of its manifestations have been referred to by the hon. Gentleman. But BSC's results in the financial year 1981–82 showed that real benefits could accrue. Output increased, and plant loading was maintained at a high level. This, coupled with reduced manning, improved productivity markedly and allowed BSC to record a small monthly profit in March 1982 for the first time in five years. When we first saw those figures, some of us looked at them with something approaching joy. We thought that BSC had made it, but unfortunately the market got its own back. Since then, as the House knows, recession has hit BSC just as hard as all other steelmakers in the industrialised world.
In 1982 we saw the United States industry working at just 40 per cent. of capacity, Japan's output cut to the lowest level for a decade, and steel production in the European Community in the last three months of the year falling to the lowest level for 30 years. This has been an extremely difficult period. BSC could not have been expected to buck the general trend and remain unaffected. But this check in the corporation's progress towards competitiveness and profitability does not, as some would argue, show that the policies have been wrong. On the contrary, if BSC had not been put into more efficient shape, there is no doubt that the difficulty in weathering the trough of recession would have been even greater.
It is against this general background that the position of the steel industry in north Lanarkshire has to be viewed. I shall refer first to the recent history of BSC tubes division and of its three Scottish works at Clydesdale, Imperial and Calder. Despite the difficulties of the past few years, the corporation's tubes division has been generally profitable. This is in no small part due to the success of the seamless tubes business which is centred on the three Scottish works. The high-quality steel tubes which they produce have a variety of applications, many in offshore oil exploration. They go to make up submarine pipeline and, from the Imperial works at Airdrie, oil well casing. The quality of these products is such that they have been able to compete not only in the North sea but in the United States market, as oil exploration boomed there over the past few years. In addition, the rather less buoyant market for the welded tubes also benefited from the oil exploration boom, with welded tube being transferred for the first time from BSC's English plants to Scotland for certain finishing operations.
As a result, demand on the Scottish tube works increased, and I recall the picture that we discussed when the hon. Gentleman came to the Department of Industry a few months ago. At the Imperial plant, for example, a second shift was introduced in autumn 1981 to cope with the increase in orders, and by early 1982 pressure had built up to such an extent that a third shift was required. However, there has since been a decline in demand. Although activity has been maintained at a generally high level in the North sea, the oil exploration boom in the United States ended in the spring of last year. For a while deliveries from BSC's Scottish plants were maintained and

prices held, but orders then declined. Tubemakers everywhere cut prices in a bid to secure dwindling business, and the market more or less dried up. By the autumn it was clear that some job losses would have to be implemented at the Scottish plants. At Imperial, the second and third shifts introduced to cope with the boom had to be ended. One production line was mothballed, and 130 jobs were lost. Across the three Scottish tube plants taken together, BSC announced 265 further job losses at the end of last year, which are currently being implemented. In addition, the corporation has recently indicated that an extra 450 redundancies will have to be implemented if the market for tube has not improved by May.
The hon. Gentleman said that there may have been some confusion over comparisons between the employment position at the three plants before the American oil exploration boom and since. My Department has rechecked the question with BSC, and it may be helpful if I now confirm our understanding of the position. In March 1980, before the exploration boom got under way, the three plants employed 3,164 people. By March 1982, this had increased to 3,420. With the end of the boom, and with the partial implementation of some of the 265 job losses announced at the end of 1982, employment in February this year stood at 3,127—a figure which, incidentally, is only slightly below the level of three years ago. Once the remainder of the 265 redundancies has been implemented, and if the further 450 job losses prove necessary, total employment will fall to about 2,500. That would represent a reduction of about 20 per cent. since March 1980. Unwelcome as the reduction would undoubtedly be, it is proportionately much less than the 50 per cent. reduction in the work force that has taken place across BSC as a whole in the same period.
The hon. Gentleman also questioned the justification for this level of redundancy in the light of the prospects for oil exploration in the North sea, and he referred to measures outlined in the Budget. It is, of course, for BSC to make the commercial judgment about its market prospects, and I have no doubt that in doing so it will take full account of the outlook in the North sea. However, I must remind the hon. Gentleman that I recently looked into precisely this question on his behalf. The advice that I received made clear that, even if North sea exploration rates increased above expected levels, the problem is that the drop in demand for tubular steel which followed the ending of the United States exploration boom has not only reduced world demand below production capacity but has left a worldwide glut of tubular steel which is on offer at very low prices. In these circumstances, even a major upsurge in North sea activity would be unlikely to lead in the short term to any radical increase in output of tubular steel.
The hon. Gentleman referred to rumours about the future of Ravenscraig being affected by the conclusion of a slab supply arrangement between BSC and an American company. My right hon. Friend the Secretary of State made the position clear at Question Time on 14 March. The Government have received no formal proposal from the BSC about a deal with an American steel company. Negotiations of that type would initially be a matter for the corporation. The Government would expect the BSC to


consult them about such an arrangement before any final decisions were taken. That remains the position, and there is nothing that I could usefully add tonight.
Before I leave the question of steel and describe the way in which jobs lost in the industry are being replaced or are proposed to be replaced by alternatives in north Lanarkshire, I should like to touch upon an issue that arouses considerable concern and comment—that is, the question of cutbacks in capacity in this country compared with elsewhere in the European Community. It is a fact that the British steel industry has made major sacrifices over the past few years, in terms of reductions in both capacity and numbers employed. But these actions have not been undertaken as a favour to the rest of Europe. Nor have they been done at the behest of the European Commission or our Community partners. They have been necessary, as I have explained, in order for the British steel industry to become more competitive. But those efforts have not yet been matched by our Community partners. The Government are not prepared to see the sacrifices of the British industry squandered by the failure of industries in other member states to restructure and cut capacity. We shall use our best endeavours to ensure that the others follow our example.
There will not be time to list in detail the differences within the EC on capacity cuts. Suffice it to say that although I have not had time to discover the name of the Italian steel Minister, I suspect that he may be called Signor Machiavelli. We shall examine the issues in great detail. I assure the hon. Gentleman that my right hon. Friend the Secretary of State will be pugnacious in his defence of the interests of Scottish and British steelworkers in our negotiations with our partners in Europe.
A number of matters should be placed on record in the few moments that remain for the debate. Most conspicuously, the hon. Gentleman asked me about the effect of recent announcements in taxation policy and the tax regime in the North sea. I am advised that the total value of tax relief initiatives announced by my right hon. Friend the Secretary of State for Energy amount to about £800 million over the next four years. My right hon. Friend said in a speech at Knutsford that there would be a magnificently lower tax regime for the new fields including the complete exemption from another entire tier of the tax system—the royalty of 12·5 per cent, that they would previously have paid on the value of all the oil that they produce. These changes will have a significant impact on prospects for these fields, perhaps doubling the number that would otherwise have come forward in the next two years.
Regardless of what has happened in oil price movements over the last few weeks and months, I put it to the House that the level of reduction in the tax take will be a considerable inducement to those involved in the business of oil exploration. I share with the hon. Gentleman the firm hope that it will have an impact upon the order levels of the plants whose defence he has maintained tonight.

Mr. William McKelvey: Is there any guarantee that the oil people will buy British steel tube?

Mr. Butcher: There is never a total guarantee. However, with the sort of money put into the British Steel Corporation over the past three or four years, I assume that there would be a pretty strong inducement within the corporation's management to encourage the Government in the belief that their money has been spent well in this regard.
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twelve minutes past Twelve o'clock.